What is the state of wayland, as of 2012-03-24?

The upcoming releases of GTK+ (3.4, released next week?) and Qt (5, released in 2012) both include wayland backends. As long as applications don't include Xlib calls, and can be built against those libraries, they will probably work with wayland. Similar is probably true of EFL. Clutter support is complete, possibly in a released version.

GTK+, when built with both the x11 and wayland backends, is not usable. A patch has been provided, but will not be included upstream until GTK 3.4.1.

Unfortunately, it seems a lot of (at least GTK+) applications do use Xlib calls (often in the form of gdk_x11_* calls), which need to be removed. Also, many applications haven't been updated to these libraries. GIMP is still being updated from GTK2 to GTK3. The project to upgrade Firefox to GTK3 is using Xlib. Totem, a video player, has been ported to GTK3 but uses Xlib.

The qtwebkit browser runs under wayland, but occasionally causes weston, the example wayland compositor, to crash (which would be a bug in weston). Too often to be usable.

There is a wayland 0.85 release which most things build against, more stable than master.

Open source video drivers are required, as there has been no support from proprietary drivers. When using Nouveau, the open source driver for Nvidia, there are some glitches in the driver. Running any (3D) OpenGL client through wayland hangs my display. In vte (a GTK+ terminal), I can't see what I type, which I suspect is also a Nouveau glitch.

There is a significant problem with enabling the wayland backend of GTK+ in linux distributions. The backend requires cairo-gl. Enabling cairo-gl causes excessive memory usage with the Nvidia proprietary driver because it is built in a way that does not work with shared memory. And at least the Debian packaging system doesn't allow specifying versions with "provides", so cairo-gl can't be packaged at all without breaking X for people running the Nvidia proprietary driver.

QT5 includes a few example wayland compositors, which I haven't gotten to work. There has recently been significant progress on an Enlightenment compositor.

Open Bugs

The Nvidia proprietary + cairo-gl mess:
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