Not quite sure, but my best guess is that they were talking about the front fork springs. On the XS400 they're a bit weak, the springs are not so stiff and you can't adjust the pre-load (so how much the spring is compressed in rest position: your base line) to make it stiffer either (which I think he meant by 'fixed dampening'). Weak front forks make the bike dive forward more rapidly and decrease stability in cornering. The upside is the better ride of course. But on the XS I have heard people reach the end of the reach with the front forks (so fully compressing them) making a hard connection between the unsuspended weight of the bike (you, the frame and the engine) and the road. That's not comfortable nor is it good for your handling.
With the rear suspension however, you can adjust the preload.
There are a few things you can do to make the front forks better: the main one is upgrading to stiffer springs. This will make the ride slightly more uncomfortable, but improve your handling significantly. Another thing you can do is put a more viscous fork oil in. Normally there's 10W in there, but you could swap it for 15W or 20W. This doesn't affect the fork travel (how much the spring is compressed) but will slow the springing motion down a bit. Which means for small bumps and cracks it will not spring in or out the full way, effectively making the forks stiffer as well.
Hope this clears some things up
