Xochimilco is a historic canal district in Mexico City, famous for its colorful boats (trajineras)…read morethat offer festive tours through the waterways. Xochimilco is a popular destination for tourists visiting Mexico City, even though it's a hike from the center of the city (you'll likely spend an hour getting to Xochimilco). We didn't visit on our first trip to Mexico City, but we did make a quick stop to tour the Xochimilco canals on our second visit to CDMX a few weeks ago.
We visited with a tour group, which I recommend. I've heard it can be difficult to arrange things on your own. I believe it. When we visited, the market at this portion of Xochimilco had just been torn down (they are rebuilding it in time for the World Cup next summer), and it made for a confusing site. Without our guide, we definitely wouldn't have known where to go.
There are lots of ways to experience and enjoy Xochimilco. For a lot of people, it's a party. You can eat, drink, and listen to mariachi music. I've heard it can be quite an experience and people can turn this into a party. You can also have a more historical- or ecological-focused experience, which is what we did (several groups focus on this kind of visit, including some that take you out at sunrise to experience it). Our tour guide taught us the history of Xochimilco (the waterways here were a main transportation venue from the pre-Hispanic period until the 20th century) and some of the ways people are trying to focus on improving the environment in the area (bringing back agriculture/chinampas and attempting to preserve habitat for the axolotl - Google it, it's amazing).
If you're hoping for a particular experience, I highly recommend checking with a tour guide who can help you pick the portion of Xochimilco and ensure you get the experience you're most interested in. It's an interesting place, but given its distance from the city center, I wouldn't say it's a must visit for first time tourists to the city.