.XSI contains what you need to run it in XNA. Scene layouts should be preserved, but animation might already be baked down. In general, it's good to keep both the source and the intermediate material (the native .SCN file would be the source in the case, and the .XSI would be the intermediate). Depending on what the artist intends to do, he might be more comfortable doing all the setup directly in the DCC. However, your artist should be able to handle you just .XSI files.
Also, if you have suggestions on how to improve the Modtool so it's more useful for you, please let me know.