Xanthan gum is a polysaccharide (sugar) that is fermented. My understanding is that it is mostly made from corn. It is used as a natural thickener or emulsifier. In gluten free baking xanthan gum is important because it makes up for the lack of gluten "stretchiness" and to help hold things together.
One odd use of xanthan gum, well, odd to me, is in ice cream where it apparently helps to prevent the formation of ice crystals.
It's also sometimes used in cosmetics to help keep creamy formulations from separation, in other words as an emulsifier.