Xcode works hand in hand with Interface Builder (from NeXT also), a graphical tool used to create the user interface.
Xcode incorporates the GCC compiler, and can compile C, C++ and Objective C source code, using a variety of programming models, including but not limited to Cocoa and Carbon applications.
Among the highly touted features in Xcode is the technology to distribute the building of source code using Rendezvous over multiple computers.