Xylitol is a natural sugar alcohol substitute. This particular type of sugar alcohol comes from birch bark.
A sugar alcohol is a type of sugar that your body does not digest like "regular sugars" in the stomach. Instead, sugar alcohols get worked on in the intestines, and aren't digested into your blood stream.
This is great for dieters, because you get a nice sweet flavor without the weight gain. However, you should be warned that SOME people (not all) have issues with the intestines as a result. They get lots of gas or diarrhea. If you're sensitive to sugar alcohols, this can be nasty. Always try ONE of a sugar alcohol item to see how it affects you personally. If you don't have issues, you're fine. If you DO have issues, it's like a peanut allergy or anything else. You have to decide how to handle this, and talk to your doctor.
I'm not saying it's dangerous - but having a sudden case of diarrhea might not be fun!
Xytitol has been used for over 25 years in various food items. It is not a ZERO calorie food - but for example Sparx Xylitol candies have .23g of sugar in them as compared to normal candy. If you're going to be a candy eater, this is a far better deal. It doesn't rot your teeth, either!
Lisa Shea's Library of Low Carb Books