The charm-loop contribution to B -> Xs gamma is found to be numerically
dominant and very stable under logarithmic QCD corrections. The strong
enhancement of the branching ratio by QCD logarithms is mainly due to the
b-quark mass evolution in the top-quark sector. These observations allow us to
achieve better control over residual scale dependence at the next-to-leading
order. Furthermore, we observe that the sensitivity of the matrix element < Xs
gamma | (sc)_(V-A)(cb)_(V-A) | b > to mc/mb is the source of a sizeable
uncertainty that has not been properly taken into account in previous analyses.
Replacing mc^pole/mb^pole in this matrix element by the more appropriate
mc(mu)/mb^pole with mc < mu < mb causes an 11% enhancement of the SM prediction
for BR[B -> Xs gamma]. For E_gamma > 1.6 GeV in the B-meson rest frame, we find
BR[ B -> Xs gamma]_{E_gamma > 1.6 GeV} = (3.60 +_ 0.30) * 10^-4. The difference
between our result and the current experimental world average is consistent
with zero at the level of 1 sigma. We also discuss the implementation of new
physics effects in our calculation. The lower bound on the charged Higgs boson
mass in 2HDM(II) is found the be higher than 350 GeV.Comment: Nucl. Phys. B 611 (2001) 338. Comparison with experiment is updated
in the present hep-ph version. In particular, the published results of CLEO
(hep-ex/0108032) are taken into account. 30 pages, 6 figures, uses graphic
