Xz is a compression program
The xz kioslave is not directly usable, and is intended for use
as a filter. For example, the tar kioslave can filter a file through
the xz kioslave, in order to display the contents of a
file directly in a Konqueror window.
If you click on a file compressed with a
in Konqueror, this kioslave is used to
uncompress it and display it as a normal (uncompressed) file.
If you are a developer, and would like to use the xz filter, you can find documentation on using kioslaves at http://techbase.kde.org
See the manual: xz.