We had the Telafirma dynamic image mod back when we were using the 4.0.x version of X-cart, but when the 4.1.x version came out we found the mod was incompatible. The lack of product support also influenced our decision.
Because of this (and several other reasons) when we decided to upgrade to the 4.1.x version we abandoned the mod and are now using the standard method x-cart has. About the only modification we added as far as images was Thickbox (mainly because it works better and can easily be removed if need be).
To answer your question, no we have not looked into using this modification for the reasons I already stated, and the fact that it most likely will not be compatible with version 4.2.x, and this sounds like something we really want to do.
The only reason I referenced the thread at
http://forum.x-cart.com/showthread.php?t=41912 is that it sounded like what you were proposing and it didn't seem to make sense that you should start at square 1 when there was already a similar project underway.