Xylitol is a low-calorie alternative to table sugar (sucrose) (approximately 40% fewer calories), and is absorbed more slowly than sugar; thus it doesn't contribute to a rapid rise in blood glucose and the resultant insulin response.
In addition, studies have shown that xylitol chewing gum can help prevent ear infections (acute otitis media).
Xylitol also appears to have potential as a treatment for osteoporosis. A group of Finnish researchers have found that dietary xylitol prevents weakening of bones in laboratory rats, and actually improves bone density. (This research was published in Metabolism -- an abstract can be found here -- and as an academic dissertation.)
Xylitol can have mild laxative effects at high doses. There is no known toxic dose; people have consumed as much as 400 grams daily for long periods with no ill effects.
Its formula is C5H12O5, with relative mass 152.15 amu.