I have just been given a rear Shimano XT disc, which just refuses to work. Everything moves in the way it should, but it has no power what so ever. The disc and pads could do with a clean, I know that, but there just doesn't seem to be enough power being generated to stop the bike. It won't even lock the rear wheel. Could it be that there insn't enough oil in it and it's hitting the end of the piston travel? That's kind of what it feels like because no matter how much I squeeze the lever it just seems to come to a stop.
Any ideas?

Check seals on the lever and caliper for leaks, if everything is ok then bleed the brake, clean the disc rotor then put new pads in. Problem solved.

needs a bleed.

Is it one of the old four piston version ones?

No, it's the two pot version.

bleed your brakes, do you know how? Avid's are easier but XT's aren't much harder

Deos the lever come back to the bar? if so bleeding needed ( wouldn't go amis anyway)

Do all pistons move? If not they need freeing and lubing

Its quite possible for the pads to be contaminated enough to cause the brake to be non functioning

Drillski, bleeding avids is a right PITA. 2 syringes with silly torx screws to remove.
Shimano bleeding is much easier!
Try Getting a syringe and bleeding the XT from the caliper up to the lever. Basically remove the lever reservoir cover, connect the syringe to the undone bleed nipple on the caliper and force the fluid up into the lever. Should push any air in the line up to the reservoir.
Once done tighten everything back up, then use a ziptie to pull the lever to the bars and leave for 24hrs. Any remaining bubbles can now migrate to the fluid reservoir.
It can take a couple of go's, but persevere and you'll be fine!