A .xap file is basically a compiled Silverlight application. The file is actually a .zip file that contains all the files necessary for the application. Just rename the .xap file to have a .zip extension and then you can open it up to see its contents. Just try it yourself.

The .xap file contains an application manifest (AppManifest.xaml) file and all the necessary DLL's that are required by the application. The first DLL contained is the compiled version of you application and has the same name of your application. In my test I created an application names "SilverlightApplication1", so the DLL is named "SilverlightApplication1.dll". The rest of the DLL's are the dependancies the application requires.

[http://pietschsoft.com/post/2008/03/Silverlight-Anatomy-of-an-XAP-file.aspx]