Aside from the fact that they're two two seperate things. What would be a reason to use XCOPY?

I think XCOPY is to copy entire directories (meaning folders) and COPY is to copy files...

Compare "copy /?" and "xcopy /?" to see for yourself.

The xcopy commands also copies the hidden files, basically copy the whole directory, subfolders and all the files within it

Try this one more useful:

Use the command xcopy to copy the files and subfolders from the Windows XP with SP1 integrated installation CD to the E:\i386 folder. For example, if D: is your CD-ROM drive, type the following:

xcopy /E /I /V D:\i386 E:\i386

From the Microsoft Windows XP Hotfix Installation and Deployment Guide