Here's what I could find but unfortunately the Yamaha UK XG web site appears to be down.
*XG is a tone generator format of YAMAHA Corporation that defines the ways in which voices are expanded or edited and the structure and type of effects, in addition to the General MIDI 1 specification. XGlite is a simplified version of XG tone generation format (less effects and effect parameters). You can play back any XG music files using an XGlite tone generator as I believe they have the same basic list of voices. However, keep in mind that some music files may play back differently compared to the original files, due to the reduced set of control parameters and effects.
In a nutshell what Yamaha XG and XG Lite does (beyond establishing a patch/voice structure above the GM midi voice assignments) is include a 16 track mixing panel and effects router, as well as dynamic (while you play/ or during play back) control of several patch related variables. All of these variables are available via SysEx messages (midi control messages that can be embedded within midi files or sent to the tone generator via a midi control surface).
XG and XG Lite are very dated and the quality of the included voices is sub standard when compared to the main voices of many modern synth/digital pianos. I believe that the XG specification limits the total sample size to ~16MB for the entire list of over 400 instruments. I believe (but could be wrong) that this memory limitation extends to the PLG expansion format which is why we haven't seen 64MB expansion boards like the Roland SRX cards. (Yes the PLG boards have their own synth engine but they still suffer from this rediculous memory limitation.)
XG and XG Lite have been licensed to many third parties for inclusion in keyboards, digital pianos, PC sound cards, etc. The XG/XGLite tone generator provides a way for a keyboard manufactuer to include a huge list of instrument voices at very little cost that are usually good enough for the casual/home musician.
There is some good info on tapping the XG potential at: http://www.soundonsound.com/sos/apr04/articles/xgmasterclass.htm http://www.soundonsound.com/sos/may04/articles/xgmasterclass.htm http://www.soundonsound.com/sos/jun04/articles/xgmasterclass.htm