No problem.
As Readme states, your character must be an elven female (no trouble with that, I hope) and your game - a "Before Spellhold" game(Chapter 2 or 3).
Also, have you slept with Anomen? If so, then, well... no Xan Romance for you in this game, I'm afraid.
If all is well, then, when you meet Xan, you get the following dialogue options:
(Memories of your past flash through your mind.)
1) (You were little more than travelling companions, but sometimes your eyes met, and everything seemed possible. Perhaps it is your chance to start anew?)
2) (You vividly recall the days you spent arm in arm, and nights that followed afterwards. Friends, soulmates and lovers, you were inseparable.)
3) (You knew you could rely on Xan in journeys and battles, but there was no romance in your relationship.)
4) (You killed this annoying elf a year ago. Why in the Nine Hells is he still alive?)
5) (You have never seen this person before.)
Option 1 starts the romance. Option 2 starts the "bonded, post BG1, relationship". Options 3 and 5 are "friendly" options, and Option 4 is - you'll see.