Xz is a compression program

The xz KIO worker is not directly usable, and is intended for use as a filter. For example, the tar KIO worker can filter a file through the xz KIO worker, in order to display the contents of a tar.lzma or tar.xz file directly in a Konqueror window.

If you click on a file compressed with a .lzma or tar.xz in Konqueror, this KIO worker 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 KIO workers at http://techbase.kde.org

See the manual: xz.