What is Xi? It's hard to tell from the "trailer" that was released only a few days ago. Now that it's live, it's much easier to decipher what's going on. This is PlayStation Home's first ARG (Alternate Reality Game), created by nDreams.
Xi is now live in both Europe and North America. Simply seek out the graffiti on the right in the Home Plaza and you'll be transported to the game Hub. It's at this point that you realize this isn't just another Home space, as the first thing you'll encounter when you enter the Xi Hub is an honest-to-goodness cutscene.
The cutscene introduces you to Xi itself, the Hub and one of the game's characters, Thom. You're immediately tasked with finding three pieces of paper littered around the Hub in order to continue with the story. There are a couple of missions to complete within the Hub right now, but from the looks of things there are plenty more to come.