Over the past few years Global Software Development (GSD) has emerged as an evolving trend in the software industry. The reasons behind this evolution are globalization, economic benefits, time to market, organizational and strategic location, access to skilled labor and reduction of costs. But despite its benefits, GSD also has challenges associated with communication, coordination and control. This study aims at investigating the benefits and challenges associated with the combination of XP and GSD both in the state of art and in the state of practice. The study also explores practices or solutions adopted in order to address the challenges of XP-GSD combination. Moreover this study compares challenges of XP-GSD combination with the traditional GSD challenges.