Well XSPH did not pan out at all. Although it seem to improve stability, it did not make enough difference and really small steps were still required and there was a lot of particle randomness. So for the mean time, XSPH will be cut out.
Next I tried using different schemes to reduce numerical dissipation. I focused on methods that work with shocks, with the view that moving to shocked flows would be easier. I was very pleased with the result. It was reasonably easy to get nice splashes and waves while keeping the scheme very stable. I'm using two different methods and both will be included in the release.
Finally I have resolved boundary issues. I use the kernel as a force function and this seems to produced very nice results. Also by including viscosity with the wall we get a approximation to the no slip condition. It should be accurate enough and I believe it will give the correct boundary conditions in the limit.
The plan now, is to first clean the code. Then add animated obstacles, and finally add rigid body's. I don't know when we will implement the marching cubes iso-surface stuff. But it will be soon.