XSVCD stands for eXtended SuperVideoCD. XSVCD is same for SVCD as XVCD is for VCD -- an unofficial hack for an existing format, in this case, for SuperVideoCD.
XSVCD is a regular SVCD disc, but instead of staying within SVCD bitrate limits, it pushes the bitrate limits up to the same level as DVD-Video does, up to 9.8Mbit/sec. With XSVCD you can also use full PAL/NTSC resolution instead of SVCD's regular 480x576 / 480x480 resolution.
XSVCD is based on the idea that if standalone DVD player supports SVCD discs, it can read the material from the disc and in other hand, when DVD player supports regular DVD-Video discs, it must be able to read higher bitrates of MPEG-2 video as well (both, SVCD and DVD-Video are based on MPEG-2 encoding, so it is the same chip that decodes both formats).
XSVCD's cons include the fact that only very small amount of video can be stored in one CD and the fact that some DVD players don't support it as it is a hack and not a real format.