I know nothing about the iTunes XML file, as I personall do not use iTunes.
But if you are looking for the features that you mentioned, Road Runner can do all of them:
- Display embeded artwork
- You can use transitions on the Road Runner skins
- Visulizations can be customized to whatever you want to use, including transparencies over the top of the skin
This is all done with Road Runner's build in Winamp control and interfacing.
Through Road Runner, you can also create, load & save playlists ect.