XP, or Extreme Programming, is a software development methodology that emphasizes customer satisfaction and flexibility. It promotes frequent releases in short development cycles, allowing for rapid feedback and adjustments. This approach helps teams respond quickly to changing requirements and improves overall product quality. Key practices of XP include pair programming, where two developers work together at one workstation, and continuous integration, which involves regularly merging code changes to detect issues early. XP also encourages close collaboration with customers to ensure that the final product meets their needs and expectations.