Prince2, FDD & Agile Development (with XP)?

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I don't think 3 methods you mention are a perfect match. I'm not fully sure what you mean by Agile & XP. I mean is there some other method besides XP which you want to use or was it just a clarification? Anyway, I assume the latter. FDD and XP don't really conflict with each other. There are some areas which would be tricky if you decided to implement both by the book but it shouldn't be hard to adjust them to get most of both. Basically FDD tells you how you approach product development and XP tells you more how you organize work. The tricky part may be where feature-by-feature design and development meets iterations. However if you aren't orthodox feature-by-feature approach may apply to the whole workload for iteration instead of a single feature, especially when you have short iterations. The main problem I see with mixing the trio is with Prince2 and FDD/XP. Prince2 deals with formal side of project management which is covered by neither FDD nor XP but in its origins Prince2 assumes more BDUF (big design up front) approach than iterative one. It means that usually in projects which use Prince2 you have more formal and more detailed design on early stage of the project as opposed to emergent design and architecture proposed by FDD. Also with XP you assume that you plan in more details at the beginning of the iteration so again design effort is distributed over the time span of the whole project. Having said that, it's not that hard to use subset of Prince2 to deal with formal side of project management and build the product according to rules proposed to FDD/XP. It just means you will have to carefully choose what you take from Prince2 and what you leave outside your toolbox. By the way: Prince2, similarly to most formal approaches assumes you use only a subset of the method - those which are relevant for specific team. Again it is different from agile approaches where you usually use everything and even add more practices/techniques specific for the team. As alternative option you may consider exchanging Prince2 with something more agile supported with required set of formalisms. Scrum comes as one of ideas although it may be not sufficient if you think about a project for a customer which requires very formal approach to project management.