The way I see it, here are the pros and cons:
You will be getting a gun and accessories that probably cost in the neghborhood of $850 new. It probably is worth at least $650 used, if not more. Even if the gun turned out to be a reliability nightmare, there are always people who would buy it, like me, for $500 or more, knowing it's probably an easy fix. What I mean by that is that if it does not feed well, it's most likely an extractor issue.
I assume you have around $500 into your XD, maybe less if you bought it cheap. At the worst, you will break even, and at the best, you'll have a good carry gun that was cheap by 1911 prices to get into. You might be taking a slight gamble on reliability, but not on price. As long as this will not be your only option for a carry gun, I say go for it, as more than likely you're getting a great deal. The only thing that makes me hesitant is that it begs one question. Why is he willing to trade straight across for an XD, when you can go buy a new one for $450 in most parts of the country. Maybe you have a ton of mags and night sights, and he got into his gun cheap, but it still seems a little lopsided in your favor.
If his gun is a functioning nightmare, maybe that's why he is selling it. However, even with a non feeding gun, you can either be less than honest and sell it for $650 any day, or be honest and sell it for $500 any day. This is just my reasoning. Take it for what it's worth. I've bought many a 1911 that didn't work for cheap, and then paid next to nothing to fix it up. That's why I say you can't go wrong. There are always guys like me who will buy it for at least the cost of an XD.