In oreder to start writing programs for ATXmega128A1 you 
should:
1. Instal AVR Studio 4.14 (or later)
2. Instal WinAVR (20080611 or later)

You will use the AVR Studio IDE for writing programs, programming 
and on-board debugging the MCU. But as AVR Studio hasn't got a C compiler, 
builder, etc. you should instal WinAVR which is a set of 
open source tools adjusted to work for AVR MCUs. So when you click
on the Build button in AVR Studio the avr-gcc tool from WinAVR is
started and so on.

Another treaky point is that Atmel doesn't provide libraries
containing useful set of functions as it doesn't support a C compiler 
of its own. So you should write your own functions using the MCU 
registers. WinAVR offers a helping hand because they provide header files
for every AVR MCU supported by WinAVR and in these headers are all the definitions
of the different registers and bit masks/positions that you'll need to use.
Also Atmel provides an application note where different applications show you the use of
the varios MCU components. These programs in fact use the WinAVR headers and contain 
definitions of macros and functions for each component. You could use these in your application
if you include the corresponding header and source files into your project. But mind you that
this is a very reduced set of functions and macros and normally you will need more in your programs.
Unfortunately it's up to you to write these.   

You could also use IAR AVR which ofers you accomplished IDE + compiler it is
commercial product, so you'll have to pay to use it. The Atmel's applications from the
application note are compiled for IAR AVR so if you want to use them with AVR Studio +
WinAVR, you should create for example new header file in your project, name it and then
copy the corresponding Atmel header file into your project.