The XL Engine is an engine that runs the “XL Games”, which are enhanced remakes/ports* of the classic games. Essentially they are remakes in the spirit of a port, or to put it another way, they emulate the original games and then provide optional enhanced features on top in order to improve playability and visuals. All these games will be able to use the “Pure Renderer”, which is a software renderer that can support the original 8 bit rendering and resolutions. Basically this means that you can play the games as they original looked and played or play in higher resolutions and color depths with a variety of enhancements. You choose how close to the original you want the games to be. Games that are currently supported, or that will be supported upon the next release are: DaggerXL - Daggerfall, DarkXL - Dark Forces, BloodXL - Blood, OutlawsXL - Outlaws
This is a short video showing BloodXL in "Bloodbath" mode. This basically means that all the weapons and items from Bloodbath show up but no enemies are represented. BloodXL is nearly the point where multiplayer is possible, now that level interactivity is nearly complete.
Note, however, that this is still early WIP. The first release of BloodXL will be included in the upcoming XL Engine Merger release.