I am using the setup with a sensor to deliver the output to a iOS or android device.
How do I accomplish it
You need to write an application that creates a socket via a WIFI connection to the XBee WIFI module and the device associated with it. If you are not sure how to do that, then i would suggest taking a step back and figuring out how to collect the data via a cabled connection to a PC first.
Do I require an wireless modem…
Could you pls provide a sample application and where it has to be uploaded
Without knowing a way to make a wired connection, I suspect you are going to need a wireless RF module to connect your sensor to. As for the application, I would suspect you would want to load it on to the Phone. As for examples, you are going to need to do some searching on your own for that.
Kindly mention if there are any limitations of using XBee Wi-Fi…
What kind of limitations are you referring to? Have you read over the product manual? The manual should give you a good idea of how the device works and what limitations it has.