why didn't they use XUL?

The only problem I can see with Royale/Flex is that (as far as I can tell) although it uses an XML based GUI language, it only works server side. I believe (and I could be wrong) that Flex dynamically generates a Flash stream, and sends that to the client, and most events are forced back to the server. Which basically means that you will need one hell of a server to scale to a large client base. I've got to research this more, but this is what I gathered by what I've read about Royale over the last couple months. I'll hold off on judging it until I get to see more examples.

DonXML

I think Don's right...except that I don't see how it would be much different than how ASP.NET works, so I don't think the server would have to be any beefier. It's the same idea as I see it, except that instead of generating HTML, it will generate a "flash stream" as Don mentioned.

Sounds pretty neato, but I think Flash is still in big trouble! ;)

Why would it generate a swf stream? I would imagine it would actually generate a .swf and cache it locally. The performance killer would only be on the first compile, then each consecutive compile would be served from the cache. Generating a swf has to be a fairly complex action, so it wouldn't make sense to perform that action *every time a url was requested, but only when the swf doesn't exist or the generated .swf is old and needs to be updated.

It's the same concept as ColdFusion source, and I would be completely suprised if it didn't work this way.

I don't think Flash is in that much trouble. Yes there may be competition in the works, but it's a big market space and macromedia still has the foot hold in the market share.

Just because Microsoft may have an alternative solution doesn't mean everyone will buy into it! If Microsoft does in fact plan on releasing an alternative solution here and gives the technology away with the operating system, then I think there might be a closer race in a few years. But who says that's bad. It'll drive the technology forward at a much faster pace. If ultimately Microsoft releases a superior product, then at least you'll have a good product to develop with.

I would assume that there is no actual postback but rather a binary stream ala Flash Remoting AMF to conduct serverside events. The plumbing is there; it would make sense to use it. Keep in mind also that the Flash client is quite powerful and in a properly designed SOA the need for server events are at a minimum.