It is interesting alternative to "what could have been", and inspired the imagination of technologists in the 70s (I believe).
It featured some unique elements: - subdivision of "documents" so that sections (sentences, paragraphs) can be folded in from other sources. Somewhat similar to remote CDNs for images, but did chunks of text (e.g. when quoting another article) - UI: being able to see multiple documents at the same time and how they connect to each other. (Not the same as annotation, but if you can imagine seeing annotations on the side of the screen... something like that) - greater similarity to the Memex in how information can be interlinked and displayed. - in built royalty mechanism. (Micro payments) - files are stored centrally in a docuverse, which is somewhat similar to a block chain in that there is an agreed interpretation of what a document "is" instead of having multiple copies of the same document.
Ultimately, the World aside Web came along and filled the need for a document publishing medium, rendering Xanadu a historical artifact, many of whose ideas have been realized by other projects in other forms.
Wikipedia entry here: https://en.m.wikipedia.org/wiki/Project_Xanadu
Also worth reading is Literary Machines, since that's an interesting historical read of how people were thinking about uses for computers.