In my opinion XBee is not about range either. I think it’s strongest point is the ease of creating a network where nodes can: join, leave, sleep, send p2p and broadcast messages. You pay extra for those things so it’s good to calculate if this is what you are looking for in your project.
Yes you can communicate with more than one XBee using the AT mode. The problem is that it becomes more dificult as in AT firmware you have to switch between the transparent mode (the one where all data is send to the recipient) and AT command mode (in which you can set module parameters). So if you want to send data to some other node you have to switch to AT mode (send ‘+++’ and wait), set the destination address, leave the AT mode and send the data. As a contrast, if you are using API mode you can do all that using a single command. API mode is not only about making you life easier, it also offers things that are not possible in AT mode (I think delivery confirmation is one example).
Mike would you be interested in helping us with the library I have mentioned? It seems that you have some good tutorial writter skils and we are in desperate need of this kind of help