The XM-25 Grenade Launcher was originally one of two weapons (the other being a 5.56mm rifle, now known as the XM-8) incorporated in the 18 pound XM-29 OICW. Rather than fire small lead rounds, it fires fairly large “smart shells”:
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.)