Xfce is a lightweight desktop environment for UNIX-like operating systems. It aims to be fast and low on system resources, while still being visually appealing and user friendly.
Xfce embodies the traditional UNIX philosophy of modularity and re-usability. It consists of a number of components that provide the full functionality one can expect of a modern desktop environment. They are packaged separately and you can pick among the available packages to create the optimal personal working environment.
Another priority of Xfce is adherence to standards, specifically those defined at freedesktop.org.
Xfce can be installed on several UNIX platforms. It is known to compile on Linux, NetBSD, FreeBSD, OpenBSD, Solaris, Cygwin and MacOS X, on x86, PPC, Sparc, Alpha...
Xfce contains a number of core components for the minimum tasks you'd expect from a desktop environment:
Manages the placement of windows on the screen, provides window decorations and manages workspaces or virtual desktops.
Sets the background image and provides a root window menu, desktop icons or minimized icons and a windows list.
Switch between opened windows, launch applications, switch workspaces and menu plugins to browse applications or directories.
Controls the login and power management of the desktop and allows you to store multiple login sessions.
Shows the applications installed on your system in categories, so you can quickly find and launch them.
Provides the basic file management features and unique utilities like the bulk renamer.
Tools to control the various settings of the desktop like keyboard shortcuts, appearance, display settings etcetera.
Beside the basic set of modules, Xfce also provides numerous additional applications and plugins so you can extend your desktop the way you like, for example a terminal emulator, text editor, sound mixer, application finder, image viewer, iCal based calendar and a CD and DVD burning application. You can read more about the modules of Xfce in the projects page.
(text taken from the Xfce about page)