Every since I purchased my '04 XG, I've been thinking about putting larger wheels & tires on the vehicle, but haven't done so because of a few things:
Larger wheels will require you to use (what is considered) low-profile tires. This combination will greatly reduce ride comfort as the sidewall of the tire is much smaller. You will feel every bump in the road. Also, where I live I didn't want to do this because of the snow. You shouldn't use lo-pros in the snow because the snow actually compacts itself between the tire and the fender well and allows you to loose traction.
If you decide to get larger wheels, you will need to purchase larger tires. Larger tires are more expensive and can put you over budget. A larger tire should handle better on dry/wet pavement and the vehicle should feel a bit more stable on the highway especially if the road surface is uneven or if it's windy outside. Again, instead of purchasing larger wheels/tires I replaced the stock springs with H&R Race springs and the handling of the car was greatly improved. It's rather easy to do...and pretty inexpensive. Plus the race springs lowered the car about 1.5 inches and I think it looks pretty sweet.
I finally made up my mind that I will purchase new rims, but I will keep it at 16" max for the ride comfort.
TireRack.com and DiscountTireDirect.com have a descent selection and you can view the rims on the vehicle. I am currently looking at the MB Drifters from Discount Tire - I'm waiting for a sale though...
If you do go bigger, you should be looking at 225/50-17 for 17" rims and 225/40-18 for 18" rims. Make sure you check for clearance, backspacing and offset. Depending on how big you go, you might need to roll the fender lips to allow for maximum clearance when turning and on bumpy roads.