We have had a lot of people ask this question, so I have added it to our knowledgebase now. But you can find out what's new in Xtreme compared to X1 here:

http://www.xara.com/products/xtreme/whatsnew.asp

There's quite a lot of good features in Xtreme for the averager user. But as stated in this thread, X1 does benefit from imagesetting and Pantone support (nothing has been removed from this version of X1).

If you are a new user to the product line, and can afford to do so, I suggest going for Xtreme. It has features that will be useful for the average user, you get the latest version and you can also buy a manual if you wish.

But, if you just want to dip your toe in the water or are on a tight budget, then X1 is a great starting to point to get into the product line. And you can upgrade to Xtreme later if you want to.