“XBee and XBee-PRO 802.15.4 OEM RF modules are embedded solutions providing wireless end-point connectivity to devices. These modules use the IEEE 802.15.4 networking protocol for fast point-to-multipoint or peer-to-peer networking. They are designed for high-throughput applications requiring low latency and predictable communication timing.” (Digi.com – vendor of XBee Radios)
In easy terms, XBee is a radio device working on a very powerful IEEE protocol 802.15.4. Low-Power requirement and standardized protocol make XBee the most favorite radio for digital communication. Among its long list of features, following are most favorite;
Applications
The direct interfacing of analog sensors and digital io, makes xbee widely accepatable in variety of areas. The typical application areas are ;
Specifications
There are many modules categorized by output power and data rate, among them the maximum specification are as ;
Range: 24 kilometers – XBee Pro 900 XSC
Datarate: 250 kbps – XBee Pro 2.5 Series
Max. Output Power: 100mW – XBee Pro 900 XSC
Radio Frequency: 2.45 GHz and 900 MHz
Analog Inputs: 6 Inputs – 10-Bit ADC
Digital IOs: 8 IOs
ADC Scan Rate: 1KHz
Anetena Types: Chip, Wire and RPSMA

More to come, I will provide with working examples along with some schematics for development boards.
In the meantime, check the links for more idea about its acceptance and applications.
Links
Introduction Presentation – Rob Faludi
Blog on Zigbee – Rob Faludi
Techinical Introduction – MaxStream
Buy Online
SparkFun – Wireless – ZigBee
Digi-Key Part Search
Happy XBeeING =)