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Things XOOPS needs:
SEO URLs - ability to add keywords to every page; it's arguable whether or not these actually help as much as links to the page, but everyone asks for it.
xoRewriteModule - include this in the core along with a method to change the directory name through modules manage that reroutes to it (requires mod_rewrite, of course). Requires some changes to a few core files along with search page and more. Make search page run off a template.
Image Thumbnailing - a method that will auto-generate thumbnail images and call them from within content, especially the WYSIWYG editors (such as FCKeditor, my fave).
Workflow - The ability for users to have/need approvers for content. So a user's posts in any module either requires approval and/or generates notification for/to approvers. So many folks ask for this. We usually just kludge it somehow or go without and trust more.
Event History/Audit Log - for administration, able to turn on and off, archive, log-rotate, etc.
Comments notifications - all and/or by module and/or by module categories (or similar segmentation).
Blocks Anywhere - merge both (from trabis and Catzwolf) and make it more easily available for use.
XOOPSforms - modified to use templates (and specify custom templates) and specify better CSS ids and to thus allow better layout on sites on the user side (most all web folks I've done sites for don't like the generic forms appearance).
Use Templates for Everything - there are still some pages that have not been smarty'd. This includes XOOPS forms among others. We should take the HTML out of every page on the user side and use templates.
Additional smarty variables for use in templates: xoops_modid, xoops_modname, xoops_modsearch, xoops_name, among others.
XHTML 1.0 Strict CSS, although HTML 5 is coming.
Some additional site/user/module tokens for use in mailer templates.
PM allowed via settings to send via email instead of solely PM on the site, allowing admins to select one (or more) and to default to one (or more) and to allow one (or more).
I'm glad to see a focus on getting a regularized interface for administration of modules. That's what tends to confuse users who aren't techies. It will help new adopters, too.
I'm also willing to work on these and other parts as desired. Some of them I've already done for installations I use. And documentation remains a key thing that XOOPS doesn't do as well as other CMSes. But I don't find another better, realistically.