It is quite convenient to use FTDI's USB cable to communicate with the XBee. Recently I found that I was unable to upgrade the firmware of the XBee via the cable. And without the upgrade I was unable to use the IO features of the XBee. Calling "ATD02" would cause an error. After some frustration I found that the problem stemmed from the missing DTR line of the FTDI cable. The solution to the problem was quite simple: Just pull the DTR of the XBee low by connecting it to GND.