Does Xara publish the entire site each time I edit my document?

Incremental publishing is supported since version 6.  When you initially publish your site, the entire site is uploaded to your server.  Subsequent edits to your document will cause only those files that have changed to be uploaded.

Incremental publishing is enabled by default and is controlled by the check the box at the bottom of the FTP dialogue which reads  "Re-publish changed files only"

Prior to MX, a restriction in incremental publishing required you to ensure your website is exported to the same local folder which was selected during the subsequent publish. If a different local folder was selected then the entire site would be published.

This restriction has now been removed ensuring incremental publishing works even after exporting your site to a different local folder.