The knock sensor won't cause a hesitation problem. The code may have triggered because of the "sputtering" the engine was doing, not necessarily because there was a problem with the sensor. By relocating it to the manifold, it's in a less sensitive spot, which could be the reason it's not triggering the code now. It's impossible to say what exactly is causing your Xterra to stall. If it doesn't start up right away, you can check for spark to the plugs. If there is no spark, the most likely problem is a bad distributor, which is a fairly common issue on the VG engines. Confirming proper fuel pressure is a test you can do. If it'll restart but just won't idle, then you may have an improperly adjusted base idle or a bad IACV-AAC valve. It would also be a good idea to check the secondary ignition components.
Since you just bought it, it would be a good idea to check for any open recalls or campaigns; if there are, a Nissan dealer will perform them for no charge. You can check for open recalls at Nissan's site, by having a dealer look up your VIN # or by calling the customer service hotline, 1-800-NISSAN-1.
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