Near the end of the game, you find out Xion's actually an artificial puppet, an imperfect replica of Sora created by Xemnas, that's been sucking out Sora's and Roxas' memories and fighting abilities. It is mentioned that at the beginning Xion didn't even have a face (hence why she was wearing the hood all the time) and later on, she actually starts looking differently to whoever looks at her. To Roxas, she resembled Kairi at first and Sora on day 357. Few days before that, Axel and Xigbar found Xion in the Wonderland and Xigbar comments "You always had that smug face" to Xion, which resembled Ventus to him, thus hinting that Xigbar already knew Ventus from somewhere.
