What is XBee and how is it different from Zigbee?
ZigBee / ZigBee Pro are mesh communication protocols that sits on top of IEEE 802.15.4 PHY.

XBee / XBee Pro are product names for radio communications modules made by Digi.  

The modules can be loaded with various firmwares to support ZigBee / ZigBee Pro / DigiMesh and come in several frequency bands.

DigiMesh is an alternative to ZigBee that changes a few things, and adds some features to make it generally better to work with.  

But, you sacrifice compatibility with ZigBee devices.  

For example DigiMesh allows routers to sleep, has lower overhead, has 1 node type vs zigbee's 3 leading to a more robust mesh, can run at higher data rates, etc.  

Frankly its a better protocol all around, in my opinion.  I wouldn't use ZigBee unless i needed interoperability with other vendor's nodes.  Not that DigiMesh is the only answer, there are other mesh protocols that sit on IEEE 802.15.4 as well.