It is important to understand the basics of XOR when discussing RC4 and WEP because it is used in the encryption process to create the encrypted data.
XOR is just a simple binary comparison between two bytes that produces another byte as a result of a simple process. In short, it takes each corresponding bit in a byte and compares them by asking "Is this bit different from that bit?" If the answer is yes, the result is 1; otherwise it is a 0. Figure 1 illustrates.
Figure 1 XOR byte comparison table.
From this illustration, you should also note one other thing. Just as the resulting bit can be deduced by comparing the first two columns, the same can be said about the original bit if the XOR bit and resulting bit are compared. (for example, 1 XOR 1 = 0 ‡ 0 XOR 1 = 1). This is an important part of how and why WEP is crackable.