Xref is used for synchronizing data between multiple resources. For example, a Customer Relationship Management (CRM) system and a Billing system both contain information about customers. If the address for a customer changes, the change should be updated in both systems.
For more details refer the below guides. I had worked on it past 3 years ago.
Synchronizing Data Between Multiple Resources from 9-9_Publish_Subscribe_Developers_Guide
Synchronization Folder from 9-9_Integration_Server_Built_In_Services_Reference
#Integration-Server-and-ESB#webMethods