Arduino.cc recommends this page as an introduction to XBee radios.
Physical Computing at ITP | Tutorials / Xbee Basics
You generally choose to work in either API mode and AT mode and can't use both at the same time. However the exception is that even radios running in AT mode will still produce API-formatted packets when they receive I/O information from other radios set up as standalone sensors.
It is not very clear to me what they mean by the alternative to AT mode "API mode". What is that?
I know what a packet is and I know how different protocols have different packet formats, but what is meant by "API-formatted packet"?