We used to have an exp system on our site, where'd you gain exp and credits for posting and doing other stuff. These could be spent on various items and skills, and it was eventually going to develop into a small game. We don't currently have such a system, but I'll be coding a new one as we switch to version 2 of this forum software. (V2 was released very recently, and doesn't have an API yet, but should soon.) For now, just ignore mentions of xp and creds, as they don't presently exist.
XFire is a gamer-oriented IM service. It's primarily a text-based service, and can be used for both instant messages and chat rooms, much like AIM or MSN.
The gamer-oriented part comes in that it will automatically detect what you're playing, allowing people to see that, and launch that game and connect to that server to join you. (If you're not a fan of revealing this sort of thing, you can disable this feature.) Additionally, for games that support it, you'll get a small notification that you have messages in the corner, and can respond instead the game, without tabbing out. It also does stats tracking, so if you're curious as to how relatively often you play each game, you can pull up the list and see. It has a couple of other handy features, like the ability to quickly capture and save a screenshot inside a game, or even record video if you're trying to do something like make a video guide to something. You can also launch a browser inside a game, great for doing something like opening up a quest guide without leaving a game. There's also an auto-updater thingie that will attempt to get current patches for all of your games. (If you find this annoying rather than helpful, you can disable it.) I think I covered all the big stuff. In short, it's a useful toolkit for gamers rolled into an IM client that's designed to be used while gaming.
As with AIM, it supports voice chat, but is rarely used for such, and never without your consent. You either have to join a voice chat channel (which you'll only be in if you create the chat or accept an invite to one), or you "answer" a "call". It is therefore very easy to avoid if you don't want to ever use it. So essentially, it's there, but only if you want it to be.
Webcams are not normally used. There is a "broadcast" thing that can be used in conjunction with recording in-game video, but it's disabled by default, and very few use it. I don't really know the details of how it works, as I've personally never used it. There is no video chat in XFire AFAIK.
