Have watched this thread with some interest as we had some of the same decisions when developing some client applications.
I would say that there are two levels of errors that can occur, domain specific errors such as not being able to do something because a business rule has been violated and infrastructure errors.
The 4xx and 5xx errors are infrastructure errors and are handled with xforms-submit-error while domain specific errors are best handled inside the data returned from the service you are calling.
What we do is to have all services return an xml record that includes a status record (1 or more) which carries all of the details of what happened to the message at the domian level.  It is quite an easy issue in xforms to then have a group relevant or not based on the return status codes.  We return two pieces of information, a status code < 0 is an error, 0 is success > 0 is informational messages as well as the descriptive text.
This is what we found to be the best way to get the status messages to work.  We also use the events xforms-submit-done and xforms-submit-error to toggle different screens for the user to review either status (good or bad) or an infrastructure error.  Works both with formsplayer and firefox although firefox currently has a bug that http errors do not correctly raise xforms-submit-errors.

regards

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Peter Nunn
Director
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VistiC Ltd.
Agile Software Development
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