  First indications of the warm/hot intergalactic medium, tracing out the large
scale structure of the universe, have been obtained in sensitive Chandra and
XMM-Newton high resolution absorption line spectroscopy of bright blazars. High
resolution X-ray spectroscopy and imaging also provides important new
constraints on the physical condition of the cooling matter in the centers of
clusters, requiring major modifications to the standard cooling flow models.
XMM-Newton and Chandra low resolution spectroscopy detected significant Fe
K_alpha absorption features in the spectrum of the ultraluminous, high redshift
lensed broad absorption line QSO APM 08279+5255, yielding new insights in the
outflow geometry indicating a supersolar Fe/O ratio. Chandra high resolution
imaging spectroscopy of the nearby ULIRG/obscured QSO NGC 6240 for the first
time gave evidence of two active supermassive black holes in the same galaxy,
likely bound to coalesce in the course of the ongoing major merger in this
galaxy. Deep X-ray surveys have shown that the cosmic X-ray background (XRB) is
largely due to the accretion onto supermassive black holes, integrated over the
cosmic time. These surveys have resolved more than 80% of the X-ray background
into discrete sources. Optical spectroscopic identifications show that the
sources producing the bulk of the X-ray background are a mixture of obscured
(type-2) and unobscured (type-1) AGNs, as predicted by the XRB population
synthesis models. A class of highly luminous type-2 AGN, so called QSO-2s, has
been detected in the deepest Chandra and XMM-Newton surveys. The new Chandra
AGN redshift distribution peaks at much lower redshifts (z~0.7) than that based
on ROSAT data, indicating that the evolution of Seyfert galaxies occurs at
significantly later cosmic time than that of QSOs.
