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I completely agree!
The url re-writing in some other (more bloated) CMS's, such as ezpublish, is nothing short of beautiful. Drupal isn't too bad either, although having 'node' in every url is a pain.
From a professional point of view, it is a little 'lacking' not being able to customise the navigation of a XOOPS site. I realise the difficulty of this task, especially with module integration etc.. But it is definately something that needs to be looked at, even if it cannot be implemented until version 3 or 4.