Xubuntu defaults with the Xfce destop environment. Xfce was designed to be light on resources.
http://en.wikipedia.org/wiki/Xfce
Ubuntu defaults with the GNOME desktop environment. GNOME is designed to be full featured AND "easy for everyone to use".
http://en.wikipedia.org/wiki/GNOME
why is Ubuntu more popular?
Ubuntu is more popular because the it is first release by Canonical, the company that funds Ubuntu. Also, Ubuntu works just fine for many people.
Am I missing something?
Not really. Xubuntu and Ubuntu are pretty much the same thing. They just have different default desktop environments. If you get Xubuntu and wish to use GNOME, type in this command into the command prompt:
sudo apt-get install ubuntu-desktop