A few weeks ago, Xeiso 0.1 was published on Launchpad with a tarball to download. It was a pretty quiet release; I had only published it because a few people were demanding a tar.gz to download instead of branching from Bazaar. It’s rather primitive compared to the current revision of Xeiso, but it supports almost the whole spec of XPK. You can get it on Launchpad, but I recommend that you keep reading to get a much more updated version.
I finally got Istanbul working right in addition to learning Cinelerra last night, so I figured I should at least get some demo footage out there. Check it out on YouTube. As of writing, that is the latest revision.
The biggest feature showcased in that video is the ability to download Xeiso packages, .xpk files. If Xeiso is installed with python setup.py install, then a MIME association is automatically added to open these files with Xeiso to install. By default they are installed to ~/.xeiso/xpk, but can also be loaded from /usr/share/xeiso/xpk for a system-wide setup.
The downloading interface is basic: it shows a package name and description, and then downloads the package to install it. A lot more will come out of that feature in the near future.
The web side of things has also been greatly improved. Xeiso.com has plenty of new documentation to have a look at. Currently under development is a web interface to game downloads in Xeiso, which will probably surface early next week.
Also on Xeiso.com is some new packaging documentation. It’s not complete, but it’s available if you want to have a stab at it.
The Live CD portion of the project has not been started. I’ve been holding it off to develop as a part of my class project for the year, so the pace will pick up very soon. But another reason for the delay is that I’m also trying to make Xeiso easily installable on already-running Linux machines. With the local installation will be a separate series of Xeiso “require-local” packages that don’t contain the game themselves, but call the game if it is already installed on the user’s system.
That said, while there will eventually be a Xeiso PPA, I do not want Xeiso to be in Intrepid. The project is still being constantly updated, and is not currently supported. If anyone manages to get it into 8.10, expect plenty of SRU bugs to be shoved down your throat. Daily. 
Edit: PPA ready.
And finally: Revision 39 marks the beginning of more open development. Starting now, I will be accepting patches, merge requests, bugs, and blueprints, all of which can be done on Launchpad. There is currently an open blueprint for sound in Xeiso: while it is supported, Xeiso remains mostly quiet. Boring.
If you are interested in heavy development of Xeiso, start out by branching and making merge requests on Launchpad. There is no official development team (~xeiso is just used on Launchpad for friendly URLs at the moment) but one can be made when necessary. If you need specific help, mail me (my first name at xeiso.com) or visit #xeiso on freenode.