Daniel has published his third revision of these patches to the X mailing list. He also writes on his blog, "[I] have finally posted the third patch series, which I think should be pretty close to final." In that blog post he goes into details how touch events with X Input 2.1 are handled and compared to standard X Input events.
The major difference here is obviously the event delivery: instead of delivering only to the first applicable target, we now deliver to allm grabbing clients, and the first selecting client. An 'owner' flag denotes whether or not the client currently owns the stream: grabbing clients may accept the touch (which ceases delivery to all other clients), or reject it (removing them from the delivery list and passing ownership on to the next client).
X Input 2.1 Multi-Touch is the new solution rather than Canonical's proposed X Gesture Extension. Nokia developers are already working on supporting the new multi-touch capabilities within the Qt tool-kit and there is a GTK multi-touch branch on the GNOME side, but it's currently based upon an earlier specification of X multi-touch.
This work not only touches the xorg-server itself, but also the inputproto, libXi, and X Input components. It will not be in X.Org Server 1.10 due out for release in February, but all indications at this point are that it will be more than ready for its successor, X.Org Server 1.11.