This looks really, really cool. I've wanted to develop xul apps for a long time but have felt that without a good way to deploy them without users having to download the entire mozilla application it was very hard...

Is there a possibility that you guys will be releasing it JRE-style at some point, i.e. people can release say ftpprogram.moz (for an ftp program) that would automatically get loaded by the xulrunner app?

Yes, the plan is to do something like that. The details have not been worked out yet, but I'll go ahead and add a comment about it in the Wiki.