Mary Jo at Microsoft-Watch confirms my suspicion that Xen is indeed The-Xml-based-programming-language-formerly-known-as-X# renamed -- and it's alive and kicking. Jorgen commented on it as well, and since he works on Don Box' Indigo team he should know what's going on there. In turn, I infer that his comment is an indirect confirmation of Mary Jo's statement.
Yet another programming language to learn ... things just won't get boring :)