Xenon and the human body
Chemist Neil Bartlett in 1962 discovered that although Xenon was a noble gas, it is able to form compounds with other substances even though it is chemically &quot;inert.&quot;
Neil Bartlett, at the time in 1961, produced an unidentified red solid and discovered that the red solid was a reaction between gaseous fluoride, platinum hexafluoride ($\ce{PtF6}$) and oxygen that was oxidized. Finally, determining the chemical structure, they found that the red solid was $\ce{O^{2+}PtF6}$.
Oxygen is a powerful oxidizing agent, being consumed in many combustion reactions. However, Bartlett believed that the platinum hexafluoride ($\ce{PtF6}$) was a stronger oxidizing agent than oxygen, and oxygen is instead reduced. Bartlett then believed if the oxidation of oxygen was possible, he could apply this xenon.

Because my co-workers at that time (March 23, 1962) were still not sufficiently experienced to help me with the glassblowing and the preparation and purification of $\ce{PtF6}$ [platinum hexafluoride] necessary for the experiment, I was not ready to carry it out until about 7 p.m. on that Friday. When I broke the seal between the red PtF6 gas and the colorless xenon gas, there was an immediate interaction, causing an orange-yellow solid to precipitate. At once, I tried to find someone with whom to share the exciting finding, but it appeared that everyone had left for dinner!

The discovered new compound was xenon hexafluoroplatinate ($\ce{XePtF6}$). Bartlett's important contribution to chemistry is a series of noble gas compounds with specific and useful properties.
In regards to your question on how xenon can be so diverse, with over &quot;100 noble gas compounds known today...&quot;

Noble gas compounds have already made an impact on our daily lives. $\ce{XeF2}$ has been used to convert uracil to 5-fluorouracil, one of the first anti-tumor agents. The reactivity of radon means that it can be chemically scrubbed from the air in uranium mines and other mines. Excimer lasers use compounds of argon, krypton or xenon to produce precise beams of ultraviolet light (when electrically stimulated) that are used to perform eye surgery for vision repair.

Material derived from a highly interesting article from the American Chemical Society.
http://www.acs.org/content/acs/en/education/whatischemistry/landmarks/bartlettnoblegases.html
Looking at the literature:

Neuroprotection

For the use of Xeon during mechanical ventilation, an article examining the neuroprotective effects of xenon,
Neuroprotection against traumatic brain injury by xenon, but not argon, is mediated by inhibition at the N-methyl-D-aspartate receptor glycine site.

Anti-Tumor Agent

Noble gas compounds have already made an impact on our daily lives. $\ce{XeF2}$ has been used to convert uracil to 5-fluorouracil, one of the first anti-tumor agents.
The American Cancer states that

Fluorouracil belongs to the class of chemotherapy drugs known as anti-metabolites. It interferes with cells making DNA and RNA, which stops the growth of cancer cells.



Anesthesia

I'm still looking for literature to add here. Some of these cover very complex physiological processes, and this is not my area of expertise. I will try to find more pertinent articles from peer-reviewed journals with high enough impact and relevance. It will be up to the poster of this question to explore in-depth as much as they need by starting at some of the literature I provide.