When I was talking about Xdarwin, I was meaning the entire XFree86 installation for MacOSX. What Symphonix was saying is completely true.
Xdarwin was made so that Xfree86 could be run in rootless mode (It normally runs as root). This enables people to run XFree86 on Macs without having to have the root user enabled...which its not by default.
As for what Xwindows is....
Xwindows is the graphical user interface to most UNIX based operating systems.... like Solaris, AIX, HPUX, FreeBSD, LINUX. Companies like Sun and SGI have their own versions of X, but they all work the same way basically(Standards are nice aren't they). Linux and FreeBSD rely on XFree86 as their version of X. Anyway X works as a client/server model. The Xwindows server typically runs as a daemon... and it basically acts sort of like a shell... its the layer between UNIX and the GUI. The Xwindows clients are the actual gui things the user gets to play with. To make this all work, your client has to have a Window manager running... like blackbox, windowmaker, fvwm, KDE, Gnome+Sawfish... etc. The window manager takes care stuff like window placement, keyboard stuff. It also is what takes care of what the actual windows look like. Also, because of this client server model, the Xserver and the Xclients don't have to be running on the same machine. In a network, you can have connect to an Xserver on one machine and display the gui on another. So lets say I have a really fast machine as a server, but a slower one as a client... and lets say you want to run Gimp... the faster server can do all the hard work(number crunching, memory management, and other cpu intenstive stuff) while the client merely displays what its doing... Keep in mind that the faster your network is, the better this works, but you can actually open an xterm over a 56k connection just fine.
Instead of thinking of Xwindows like its classic... think of it as another gui that macosX can run besides the Aqua gui. The big difference between the two is that a ton of software has been written over years for X while aqua is relatively new. If you have ever looked at FreeBSD's ports collection you see a ton of software that requires Xwindows... many of these ports have also been ported over to Darwin...
Hope this clears things up for you abit. I guess if you can make this work for your Mac, you will have a veritable plethera of software that can run on your mac that you couldn't before. Many a useful tool has been developed for Linux and the *BSD's that will run just fine on MacOSX once you get X running.
One small side note.... I really hate that Apple started using X as its OS number. It confuses things when there already exists another X as In Xwindows(which has been around since the early 80's).... sure makes talking about MacosX and Xwindows in the same conversation confusing.