Xtheater was created due to a lack of truly Free software for viewing of MPEG Systems streams. Products based on mtv (and mtv SDK) can never be fully open source and will always be tied to whatever platforms mtv decideds to release support for. This is in no way Free. Loki has provided great oppurtunity for Free software by releasing their smpeg.
The goals of Xtheater's design is to be simple, yet functional. The GTK iinterface allows the program to be conssitent with the environment, yet not waste too many resources. I feel that the interface for playing a movie should be functional, not neccesarily flashy, after all, it is the video being played that should hold our interest, and be the eye candy. Who wants to pay attention to the controls while there is a movie being played? For this reason, I intend to keep the interface in some standard toolkit (probably GTK), and not develop some proprietary "skin" or "theme" format, only supporting the "themeing" toolkits provide. I like eye candy as much as the next guy (I run enlightenment, and use gtk pixmap themes), but with movies playing, I typically start it playing and fullscreen it anyway :) I think the dynamic reconfiguration that Xtheater provides is more useful anyway.
Also, the decision to make the playback window free floating makes it much
more usable for things such as using Enlightenment's fullscreen
"alt-enter" combination. Players with embedded display windows are a hastle
to manipulate in any sort of window manager context, whilst free floating
playback windows can be manipulated just like any other window.
In short, the philosophy of Xtheater is to have a simple, yet powerful interface, with as much flexibility offered to the user as possible, without the overhead of yet another independent skinning mechanism.