He is a powerful archmage who was long ago attacked by the green drake, Morphaz, who devoured one of his apprentices whole and as such consumed an arcane shard of enormous power. The vengeful archmage has sworn to hunt and kill the drake and recover the shard from his stomach.
Archmage Xylem lives in his tower in the mountains of northern Azshara. To be able to get to the tower and to Archmage Xylem, you need to speak with Sanath Lim-yo[28.1, 50.1]
He is described by Jediga as being very dangerous, and acting odd compared to other humans. When the player returns without any problems she says she would've expected the mage to be at least reluctant.
Cataclysm
This section concerns content exclusive to Cataclysm.
Archmage Xylem is still in his tower in Azshara, but seems to have stumbled upon something that has quickly driven him insane. It should be noted that it is no longer possible to gain access to the tower by talking with the now disgruntled Sanath Lim-yo; Alliance players need a Flight Master's License to be able to fly directly to the tower [1] while Horde players need to follow a quest chain that begins with Azshara Blues.