The XM-8 is not dead. I've handled it myself, and, ergonomically, they've improved over the M16/M4 drastically. I've never fired it, unfortunately, but I've talked to several who have, and they love it. It's a very nice weapon, and I'm looking forward to using it (just put an ACOG on it!).
Video of the XM-8....You have to scroll down to the bottom.
http://www.armedforcesjournal.com/blackwater/videos.html