We first talked about Wayland in late 2008 when the project was still in its infancy by Kristian Høgsberg. Wayland is still very much a side-project of Kristian's that just receives commits every once in a while and has yet to gain any widespread adoption, but it still possesses a lot of progress. Wayland can run dual nested X.Org Servers within it, now runs off Mesa rather than Eagle EGL, supports the KMS page-flipping ioctl, a DRI2 driver is being worked on, and much more. However, it doesn't do too much yet for the end-user, but that should change once the GTK, Qt, or Clutter tool-kits is properly supported within Wayland. Right now there's just a basic terminal and a few demo applications that can run within this display server that leverages kernel mode-setting.
As briefly detailed in this Launchpad Blueprint specification, the Ubuntu X.Org teams wants to make it easier to test the Wayland Display Server within the Ubuntu 10.10 release. Ubuntu developers want to go as far as providing a Wayland Display Server package within their universe repository. However, to get Wayland running atop an Ubuntu installation currently requires a few steps.
The barrier to try out the Wayland Display Server is not nearly as great as it was back in 2008 or even last year as more of the changes need to handle Wayland are merged into their mainline code repositories. When last toying with Wayland on Ubuntu 10.04 LTS a few weeks it ago, it required a branched version of Mesa, an updated version of Cairo built with the DRM back-end, and a few development packages from the Ubuntu repositories.
Fortunately the biggest piece of the puzzle, the kernel mode-setting support for the different graphics hardware, is mainlined for ATI, Intel, and NVIDIA (through Nouveau) GPUs with the Linux kernel and those pieces are enabled by default in Ubuntu 10.04 LTS. However, Wayland will not work with the NVIDIA or ATI/AMD proprietary Linux drivers as they do not support kernel mode-setting. There has some talk about making Wayland dependent upon OpenWF rather than the Linux kernel mode-setting interface directly, but that hasn't materialized.
We'll see where Wayland gets by the time Ubuntu 10.10 is due out in October.