Tiago's new XWayland private protocol features the X window manager s eparate from the Wayland compositor, features a new window positioning mechanism where by X clients can continue to access global coordinates, and the approach of using two shell surfaces per X application. The two surfaces is for one doing the frame and the other is for the application itself.
The ability for XWayland clients to access global coordinates -- just like now in an X world -- while Wayland/Weston clients are not able to access the global data, has already raised some concerns in response to this latest protocol work.
This work out of Intel's Open-Source Technology Center is still a work in progress with some functionality still missing, various bugs, and some things like rotation support not yet being implemented.
Vignatti's changes affect his XWayland 1.12 branch of the X.Org Server, Wayland itself, and the reference Weston compositor. Here's what Tiago's current Wayland/Weston desktop looks like with X11 applications running atop:
XDC2012 developer event. It's likely we will see the mainlining of XWayland happen within xorg-server for the next 1.14 release due out in H1'2013.
The current XWayland protocol work is referenced from this mailing list message.