Originally it was cus of their x-tra power in combination with xaviers name. (stan lee wanted to name it "the mutants" but editors wanted to call it x-men since noone would know what a mutant was, but x-men I suppose everyone knows 馃槢 We should be happy about that though) Later it's also been said that the gene that causes mutantcy is called the x-factor.
Stan Lee himself said that X stands for Xavier (in a "Soapbox"馃槈. So X-Men is actually Xavier's Men. But I think they came up with it later and they had absolutely no idea about what it meant in the first place.
Stan Lee wanted the "Mutants" to be the title of the book, but he was vetoed, and then he said X-Men.
EDIT: arggh..... Marvelgeek! 馃檪