With the XT you pick an amp, cab, mic, and eq. You can then add a stomp box (compressor or distortion box), modulation effects (chorus, flange, phaser, etc.), delay (tape echo, analog/dig delay, etc.) and reverb. There are also a whack of other effect add-ins like octave doubling, basic synth sounds (to track a single line), etc.
The stomp boxes are pretty good. You have a few to choose from, so there are some classic dist pedals (like the Rat, etc.) and a great tube screamer. I actually have an Analog-man modded TS9 and when I A/B it with the XT I'm hard pressed to tell the difference.
My favourite distored XT sounds are the Marshalls (JTM, Plexi) with the tube screamer kicked in. They completely rock. There are a lot of amps that have their own good distortion (via preamp) sounds as well- Soldano, 5150, etc. And also there a ton of great clean sounds.
It's a really handy unit if you love to fiddle, and it's much more portable than lugging a Mesa stack around