The XM-25 computerized grenade launcher was originally one of two weapons (the other being a 5.56mm rifle) incorporated into the 18 pound XM-29 OICW. The OICW was originally developed to produce a superior replacement for the 40mm grenade launcher. The 40mm rounds weigh eight ounces each, the 20mm OICW round weighs half that. There were several major problems with the OICW. It was too heavy and ungainly, and the 20mm "smart shell" it fired did not appear capable of effectively putting enemy troops out of action. So, in August, 2003, it was decided to take the 5.56mm portion of the OICW and develop it as a separate weapon (the XM-8) and develop the grenade launcher part that fired the "smart shell" as the XM-25. But the XM-25 would use a 25mm shell, which would generate 50 percent more fragments (and heavier ones at that) than the 20mm shell of the OICW.
As far back as 2001, there were doubts about the actually effectiveness of the 20mm shell. A new technology was used to create small, very hard, fragments when the shell exploded. The fragments were supposed to be able to penetrate protective vests and keep going into enemy troops. But there were doubts about just how lethal, or even harmful, these small fragments would be to enemy troops. Tests on substitute materials (no human subjects were available) were inconclusive. This is one reason why manufacturers are so eager to get their new weapons "tested in combat." Traditionally, 20mm shells just exploded and generated shock effect and a few dozen fairly large fragments. The 20mm shell was never meant to be an anti-personnel weapon, and was most commonly found in anti-aircraft weapons. Many pilots had been killed or injured by those 20mm shells, but the army decided to go high tech with it's hot isostatic pressingt to produce lightweight, and lethal, 20mm warheads.
The 25mm shell in the XM-25 provided some more options, and, it is hoped, more lethality. The US has fired over 30 million 25mm shells from the cannon on its M-2 Bradley armored vehicles and was satisfied with the lethality of that shell against infantry. One of the new options with a larger shell is a fuel-air explosive (or "thermobaric") shell for the XM-25. Such a shell would cause greater blast effect in an enclosed space, and actually suck most of the oxygen out of a cave or closed room long enough to make surviving troops at least a bit groggy. In combat, every bit helps.
The 20mm and 25mm "smart shells" use a computer controlled fuze in each shell. The M-25 or M-307 operator can select four different firing modes via a selector switch on the weapon. The four modes include "Bursting" (airburst). For this to work, the soldier first finds the target via the weapons sighting system. This includes a laser range finder and the ability to select and adjust the range shown in the sight picture. For an air burst the soldier aims at an enemy position and fires a round. The shell is optimized to spray incapacitating (wounding or killing) fragments in a roughly six meter radius from the exploding round. Thus if enemy troops are seen moving near trees or buildings at a long distance (over 500 meters), the weapon has a good chance of getting them with one shot. M-16s are not very accurate at that range, and the enemy troops will dive for cover as soon as M-16 bullets hit around them. With smart shells, you get one (or a few) accurate shots and the element of surprise.
The other modes are "PD" (point detonation, where the round explodes on contact), PDD (point detonation delay, where the round detonates immediately after it has gone through a door, window or thin wall) and "Window", which is used for firing at enemy troops in a trench, behind a stone wall or inside a room. The round detonates just beyond the aiming point. For buildings, this would be a window or door frame, cave entrance or the corner of a building (to get enemy troops thought to be around the corner.)
The XM25 is still a heavy weapon, with the final version coming in at nearly 18 pounds. The 25mm shells are heavier as well, about half a pound each. On the plus side, there is already a 25mm armor piercing round (using a shaped charge capable of penetrating over 50mm of armor). This makes the M-25 capable of knocking out light armored vehicles.
The 25mm "smart shell" was originally designed for the 38 pound OCSW (Objective Crew Served Weapon). This has now evolved into the fifty pound XM307. Both can fire up to 220 25mm shells a minute (or nearly four a second, as one or two second bursts of fire will be the norm). The M-307 is to replace the M-19 40mm automatic grenade launcher. Compared to the M-19, the M-307 is more lethal, has a longer range, its shells travel twice as fast and it has an armor piercing round. In addition, the M-307 can quickly be converted to a .50 (12.7mm) caliber machinegun. The 25mm OCSW was originally supposed to replace the .50 caliber machine-gun, but with 25mm ammo costing twenty times as much as .50 caliber shells, and the .50 caliber still proving so useful, and popular with the troops, it was decided to get the M-307 into use to see how the two weapons compared in combat. The battlefield will determine which weapon survives.
The XM-25 is not expected to be ready for combat testing for at least another year. It will probably show up in Afghanistan and Iraq before too long. Given the fanaticism of some of the al Qaeda fighters found in both places, this will prove if the "smart shell" is lethal as well.