The following text is excerpted from The Art of Agile Development by James Shore and Shane Warden, published by O'Reilly. Copyright © 2008 the authors. All rights reserved.
"I can see how XP would work for IT projects, but product development is different." —a product development team
"I can see how XP would work for product development, but IT projects are different." —an in-house IT development team
Before adopting XP, you need to decide whether it's appropriate for your situation. Often, people's default reaction to hearing about XP is to say, "Well, of course that works for other teams, but it couldn't possibly work for us."
XP's applicability is based on organizations and people, not types of projects.
Question that assumption. I've helped a wide variety of teams adopt XP: 20-person teams and one-person teams; huge corporations and small startups; shrinkwrap, in-house, and outsourced software vendors; proprietary and open source developers. Through these experiences, I've learned that software teams are more similar than they are different. XP's applicability has far more to do with your organization and the people involved than the type of project you're working on.