After sitting on this quite a bit last night, I really began to see exactly what the Developer has in mind so I will try to explain it the simplest and best that I know so others may begin to understand more.
ATC, please comment whether this is on the right track or not as I am trying to clear some things up.
The Xnode1. Every wallet on the network is capable of being an "Xnode" depending on the amount of coins that are held in that wallet - current suggested is 1000 minimum, but that may change.
2. The "Xnode" is essentially a decentralized mixer that passes the transactions through to the next "Xnode" until it is received by the intended target.
3. Keeping your wallet open without the "Xnode" option will pay the 3.33%/yr POS.
4. Keeping your wallet open with the "Xnode" option engaged will pay additional transaction fees on top of the POS.
5. Acting as an "Xnode" will incentive users to keep wallets open and active strengthening network security.
A concern that was raised yesterday was that the pass through transactions are visible to users, and that a wallet modification would be able to intercept and steal the coins. This is where the muli path paradigm comes into play, along with the additional network layer or "XC Alpha".
1. According to the OSI Model -
http://encyclopedia2.thefreedictionary.com/OSI+model - There are 7 Layers to the Network stack. The currently titled "XC Alpha" will add an 8th layer that will essentially come in between layer 2 and 3. The initial request and encryption is initiated on this layer putting the transaction in motion.
2. Once the transaction is initiated, an on demand "Xtunnel" will be created connecting the requester to the Xnode pool. It is within this tunnel that transactions are transactions are submitted to the pool network where the coin mixing is processed and deliverd to the receiver.
At the current time, The additional layer is not in place and that is why users can see transaction processed through their wallets, and they are currently unencrypted?? Once the "XC Alpha" has been fully integrated, users will not see the transaction as they currently do, but they will see it in a similar way that they see the current POS transaction. These transactions will be fully encrypted and the possibility of stealing the transaction as mentioned would be nullified.
The transactions should be represented in the users wallet not as "mined" but as something simply like "X" (just a suggestion). In this manner, they will be able to see that the XNODE is actually working and paying out as promised.
I hope I am on track here, and I hope this helps to understand more. once again, if ATC would care to comment, edit, or tell me I am full of shit, feel free.
so in that case you ll see alts value goes up, also market cap in the same time. 
