XChat is an IRC chat program. It allows you to join multiple IRC channels (chat rooms) at the same time, talk publicly, private one-on-one conversations etc.
XChat-WDK is a patchset for XChat SVN which allows for building on Windows using the Windows Driver Kit. This results in binaries usable across all versions of Windows starting from XP (read why).
In human language it means it's a free build of XChat for Windows. Since XChat is open source it's perfectly legal, and all you have to do is download, install and run!
Besides XChat-WDK, you can find builds of various open source libraries as well. Most of them are used by XChat-WDK itself. Feel free to browse our site for more info.