Deciding whether to spare Xanthe and make a deal in Blood of Dawnwalker is a really tough choice. On the one hand, she's an evil ancient vampire who kidnapped and killed a bunch of innocent women, but she was only using Brencis as a tool of convenience. That might be enough for you to ponder what advantage an alliance with her could bring.
Obviously, this guide will contain spoilers for Xanthe's The Cycle of Love quest, but otherwise, here's the outcome if you spare her.