Normally you only use Rx and Tx so unless you use more pins (possible) the TXB0104 should do.
However that adafruit board has everything you need, regulator, level converters and everything and it's only $10, I'd just get that unless you plan to go into production.
For 10 bucks I'd just put a horizontal socket strip on the board and plug the Adafruit board into that. BUT, if you want the job to look more "native" to your design then add 2 10-way 2mm socket strips and a TXB chip.
It probably depends on if this is a product or a one-off for private use.
Well for now its just for home use, but you never know....
Yeah I might go the adafruit route, my head is going to explode already with just the other stuff. Then I don't have to figure out the ins and outs of the the IC.
That's true, but do you care? Like I said is this a one-off or a production run of 1000s. It make a difference. If it's running off batteies that makes a difference as well.
To down shift all you need is two resistors. To upshift is harder but if the Xbee puts out 3v3 then that should work directly with a 5v Arduino because the logic high threshold of the AVR chip is 3v.
Not exactly production strength but should work.
You can upshift with a transistor and an inverter or two transistors or a comparator or an opamp, there's no end of options but I reckon those TXB chips have to be the simplest way to go. There's a 1-bit version as well (TXB0101), use resistors for the down shift and the TXB0101 for the up.
The Adafruit board is cheap but at $10 it will add maybe $20-30 to a finished product. You could prototype with that then do a final board.
We use those TX's for this very thing, they can shift all the way down to 1.2v which is great if you need to interface 1.8v circuits. We put an octal TX on our xbee adapter, breaking out the extra ports and shifting a few others on the xbee as well, why not use it as a level shift breakout as well:) They work really well and are very easy to use, and pretty darn cheap as well!