I don't know if the original poster is still around. Have not seen posts from him in a while. I know the post is not new, but I now have more experience towing with the Xterra than my test drive last fall with the dealer.
I can explain the noise and RPM. I went for my 2nd trip this weekend with my new trailer. The dry weight of my unit is 3600lbs including options (just added the weight from the brochure, not necessarily accurate). We were used to tent camping so we never brought a lot of stuff, it had to fit in the Xterra. So we still don't bring a lot as we are just weekenders. I am roughly estimating here that we are not much over 4000lbs, closer to 4500lbs if we bring fresh water. We usually bring 5 gallon from home for drinking and use the water at the campground for the rest.
So anyway, back to topic. On flats, I would drive 100 Km/h (62 MPH) with the OD off and RPM around 3000 with the Torque Converter (TC) locked, I originally thought the TC did not lock in D (OD off). Going up some hills (not Western mountains), I would loose speed going up, I actually gradually let it slow down as to not push it over what it's capable to do. Once the speed dropped below 80Km/h, the TC would unlock and the RPM would jump to 3500. At which point I let it slow down to 70MPH and then manually down shifted to 2nd. I don't like driving with the TC unlocked as it generates more heat then when locked, so I intentionally let it slow down to slow enough to be in 2nd. Once in 2nd going uphill is a joke at 70Km/h.
So the crazy RPM and sound was probably at the point where the original poster's TC got unlocked. The transmission is noisier with the TC unlocked and as soon as it is unlocked the RPM goes up so the engine is also noisier.
As far as power, there is enough power to make it up any hill, but the bigger/longer the hill, the slower the speed will be at the top.
My only advice to Arenzr is that when the TC gets unlocked, don't push it to keep up your speed. Let it slow down if it wants to.