The idea behind the X-Card is real simple: pointing to it or holding it up is meant to signify that the game is going in a direction that the player finds uncomfortable, disconcerting, or hurtful. The rest of the table then backs away from whatever they were up to, perhaps with some sort of rewind or revision. Since the X-Card was formulated under a framework of ongoing consent, there is no option to challenge or override the usage of the X-Card. Nor is the person who played the X-Card under any obligation to explain or justify themselves.
I've never played in a game that used X-Cards and the kind of safety rails it provides seem less necessary in the stupid and shallow games I tend to run, but I still think they're a pretty smart idea. Especially in convention play where no one knows anyone else's psychological buttons or hard limits. The X-Card strikes me as a genuine advance in the field of role-playing technology.
That naughty fellow Venger Satanis seems to feel differently, though. His Cha'alt X-Cards are a response to the inherent squeamishness of the original concept. Venger's X-Cards come in sets of 8, one each for the major themes of his Cha'alt campaign setting: eldritch, gonzo, science-fantasy, postapocalypse, humor, sleaze, pop-culture, and grindhouse exploitation. Players hold up the card to indicate they want more of that theme, requiring the ref to oblige. In exchange for reminding the referee that Cha'alt ain't your daddy's vanilla D&D, the player earns a point of divine favor, which can be turned in to reroll a poor die throw.
This strikes me as one of those "the opposite of a good idea is also a good idea" situations. I wouldn't use both the original and Venger's X-Cards at the same table, but I think either could could enhance a lot of different kinds of games. To use Venger's idea in a non-Cha'alt game would require coming up with your own list of campaign themes to build your X-Card deck around. I've been thinking about this vis-a-vis my current Dillhonker City campaign. Here are my ideas for card themes:
Technically, We're in Early Modern Europe
Elves Fucking Suck
Wizards Make Everything Worse
Like Tolkien But Stupider
Maybe some of my players will have some additional ideas.
PS: Venger is running a Black Friday sale on his Cha'alt hardcover. Details here.