Jaguar, and a lot of other car manufacturers, decided to use Nikasil in their engines in the mid to late 90's as a way to line a cylinder in an alloy block to avoid the expense of steel liners. This decision turned out to be fatal for more than one engine and Jaguar XJR's, because of their superchargers and higher compression, have had their share of issues. Nikasil turned out to be less than expected in the durability category and when this coating wears out, compression drops and significant power will be lost.
Alloy engines usually require steel liners in the cylinder wall to prevent excessive wear. This is because alloys tend to be soft and cylinder walls take a lot of abuse. Alloy is much lighter than steel though and has been an attractive weight saving material for years in racing applications.
It is important to know which cars were affected because not ALL Jaguar XJR owners need be concerned. Jaguars built between 1998-2000 were the only ones who used Nikasil so if you own a 2001 or newer model, you are in the clear. In 2000 Jaguar began to switch to steel liners to rectify the problem. Cars with 6 digits in their vin# at the end have Nikasil, cars with 5 digits at the end of their vin# have steel liners. A lot of the Nikasil Jaguar XJR cars had their engines replaced under warranty, but there are a lot out there who missed out.