XChat is an IRC chat program. It allows you to join multiple IRC channels (chat rooms) at the same time, talk publicly, private one-on-one conversations etc. XChat-WDK is a patchset for XChat SVN which allows for building on Windows using the Windows Driver Kit. This results in binaries usable across all versions of Windows starting from XP (read why).

In human language it means it's a free build of XChat for Windows. This project hosts several other files, not just XChat-WDK itself. Go to the website for more info.