Arcan is a display server++ project that has been mentioned on OSNews a few times before. Arcan's developers recently posted an in-depth comparison of Arcan to Xorg - claiming to soon be not only at feature parity but beyond it.
It is worthwhile to stress that this project in no way attempts to 'replace' Xorg in the sense that you can expect to transfer your individual workflow and mental model of how system graphics works without any kind of friction or effort. That said, it has also been an unspoken goal to make sure that everything that can be done in an Xorg environment should be possible here - in general there is nothing wrong with the feature set in X (though a bit limited), it is the nitty gritty details of how these features work, are implemented and interact that has not really kept up with the times or been modelled in a coherent way. Thus, it is a decent requirement specification to start with - just be careful with the implementation and much more can be had to a fraction of the code size.
A fascinating read if you are familiar with some of the technical difficulties here.