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you're close davidl, but the real argument is that Joomla has greater flexibility for the web artist/designer. Because it let's you easily arrange the blocks how YOU want or let's you easily insert the banner that YOU want etc it means there is greater potential for pleasing design.
Of course you're quite right in saying that this also means you're far more likely to find truly awful sites - the point is that the makers had the flexibility to make it look that bad! If you give a child a pencil, they'll make a mess, if you give them twenty different colour crayons, it'll most likely just turn into a bigger mess.
However don't consider this a complaint at XOOPS - in fact it's the other way around - XOOPS is very limiting in comparison to Joomla's design potential - however this is what you need for a CMS.
Joomla will let you put blocks wherever the hell you want - however it will also totally screw up your site design without telling you. If you are managing content across thousands and thousands of pages (as you probably will be with a CMS) then you want to know that when you move, say a block, and it looks fine on one page, it'll look fine on all.
Xoops is incredibly robust in this aspect and it's almost unheard of to find a XOOPS template that looks terrible in certain browsers, or doesn't work, it's highly common with Joomla and co.
I think XOOPS is in a great position, providing the developers use their advantage. Essentially they can simply watch the opposition. If they discovered that users were really like the fact you can add TWO far right blocks in joomla - then for the next build add a right block and a far right block. Problem solved AND you are still the more stable for the end-user.
Likewise as this discussion started - if people are actually being drawn away from XOOPS because other CMS' like Joomla let you insert thumbnails for news items eaily on recent news lists, then add this feature!
At the end of the day XOOPS is far more stable and vastly more user-friendly. The latter being the single biggest advantage for any CMS in the world today - far too many are unwieldy with illogical terminology.
And I'd say that was a big plus for xoops.