BuddyPress is installed as a WordPress plugin, so isn’t too difficult, but you do need a compatible WordPress theme. Xi now has support built-in, but it is disabled by default (no point loading stuff if your don’t need it).
Enable Xi BuddyPress Support
Update: BuddyPress is enabled as an option the theme options from version 1.4 of Xi.
You will also want to add links to the main BuddyPress pages in your menu somewhere, using the WordPress menu builder. The complete set is:
You can read more about BuddyPress and how to install here.