Going on for several weeks now has been the work by Eric Anholt at Intel to add GLAMOR acceleration to Xephyr. GLAMOR is the acceleration method for pumping 2D via OpenGL acceleration. Originally GLAMOR was its own standalone library but GLAMOR merged into the X.Org Server for the upcoming 1.16 release. Xephyr meanwhile is the modern approach for running a nested X.Org Server with the server targeting an existing X11 server window. The work by Eric is about allowing that Xephyr window to utilize the GL-based GLAMOR 2D acceleration as Xephyr normally can't use 2D acceleration of the host system.
The patches that have been called for pulling into the Git tree provide a -glamor option for Xephyr that would allow it to use the server's built-in GLAMOR acceleration code. The patches also hook-up the GLAMOR X-Video code and also support for DRI3. To the standalone GLAMOR library, it's had DRI3 and X-Video support.
The pull request for this work can be found on xorg-devel. X.Org Server 1.16 is planned for release in July with these GLAMOR improvements and hopefully other exciting changes, like possibly XWayland.