You've installed Xerte on your PC in XAMPP. This works to be able to get you started, but it is not really meant to host objects to other people, because normally your individual PC is not reachable over the internet due to protective firewalls etc.
So normally if you want to use Xerte with students, etc, you install Xerte on a public webserver which is reachable through the internet.
As far as mathematics are concerned, Xerte is using Mathjax as a mathematical library. Mathjax can handle Latex. There is a button in the editor to popup a Mathjax helper dialog. See also
www.mathjax.org