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I would not give up! Your XOOPS site is going to be easier to work with and infinately more functional. I would certainly put some effort into theming your site. Your theme looks very similar to the XOOPS default theme. It does not have to.
The one drawback I see with XOOPS is the asthetics of the default theme and backend of the site. There is all of this functionality there hidden under an ugly interface and it makes it a hard sell.
If I were you, I would put some thought and effort into coming up with a way to make your site not look like a XOOPS site and making it as pretty as possible. I would make a couple of themes and have the members pick which one they want to use. You are going to have to make this an easy decision for them. Get the theme looking good and they will see past it and see the functionality of xoops.
The bottom line: Pretty sells, ugly does not. All of the functionality in the world hidden under an ugly theme is going to be wasted on the members.
Here are a couple of examples of themes that (I have been told) do not look like boxy XOOPS sites: (all of these are modifications to available XOOPS themes.
http://kreitergeartech.comhttp://churchthatcares.orghttp://xoops.mattregister.comThere are countless examples out there.
-Matt