The real point is, didn't we *want* an official release to come out and render the XO project moot, even if we didn't expect that to happen at this point? I know I did, as much as I respect and applaud the extreme effort that has gone into the project. The whole point of the project seemed to me to be providing for ourselves what LFL wasn't providing. Now that they are (apparently) going to provide it, we can say 'mission accomplished' when it arrives.
But that doesn't mean the project has to end. Perhaps this announcement has taken some of the wind out of the sails, but there's no reason the XO project can't still be carried out. If nothing else, it will be the best representation of the laserdisc transfers that we will ever have on DVD, and unless that's a carbon copy of what LFL is doing (and I really don't think it is), there's no reason to abandon it.
--SKot