XP teams practice small releases in two important ways:
First, the team releases running, tested software, delivering business value chosen by the Customer, every iteration. The Customer can use this software for any purpose, whether evaluation or even release to end users (highly recommended). The most important aspect is that the software is visible, and given to the customer, at the end of every iteration. This keeps everything open and tangible.
Second, XP teams release to their end users frequently as well. XP Web projects release as often as daily, in house projects monthly or more frequently. Even shrink-wrapped products are shipped as often as quarterly.
It may seem impossible to create good versions this often, but XP teams all over are doing it all the time. See Continuous Integration for more on this, and note that these frequent releases are kept reliable by XP’s obsession with testing, as described here in Customer Tests and Test-Driven Development.