First make sure you have the Xport configured correctly. Telnet to it and verify you have the following channel 1 setup (9600 baud, I/F mode 4C, Flow 00, Connectmode D4)

*** Channel 1
Baudrate 9600, I/F Mode 4C, Flow 00
Port 10001
Connect Mode : D4
Send '+++' in Modem Mode enabled
Show IP addr after 'RING' enabled
Auto increment source port disabled
Remote IP Adr: --- none ---, Port 00000
Disconn Mode : 00
Flush Mode : 00

Make a note of the IP address, you'll need it later

Download and install the AFSoftSerial libray and then upload the SoftSerialTest sketch included

You will only need 2 pins for this example, the XPort RX pin goes to the Arduino's pin 2 and the TX pin goes to the Arduino's pin 3

Telnet to port 10001 of the XPort, then start up the Serial Monitor. Reset the Arduino (it should auto-reset when the serial monitor starts). After the startup delay (if there is one) You should see "Goodnight moon!" in the Arduino Serial Monitor and "Hello world?" in the telnet window. You can then send from the Arduino to the XPort...

and vice versa...