Wow! That's a hell of a price for a Xoom. I bought mine for 3x that and had to get a contract (3g) as well. I've used mine a lot, but not the 3G so much. Mostly around the house and at work for things like reading books, web and email. Once in a blue moon when my comcast internet goes down and I use the Xoom as a hotspot for my home.
IMO if you are going to be mostly in wifi range do it and get the cheapest contract.
Full Disclosure I do not have 4G and not planning on upgrading.