You don't need the xlibs package to run xfce4 (in fact nothing is based on it yet).
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For those who are wondering :
The xlibs package contains some binaries, libs and fonts that were left out pdaXrom. I just compiled it to see what I could add to my Z and to compile some other apps against.
Also, it contains "xeyes", "xcalc" and "xclock", and some apps I played with on my HP-Apollo running HP-UX in the early 90ties. "xcalc -rpn" gives you a hp15c (hp11c) based calculator.
The package seems to mess up the fonts, but by leaving the font section out "startx" or "startxfce4" everything runs just fine.
Install or use at your own risk.