Hi Grant,
I'm still using the ATXMega16 recently for some projects but since I
do not USB I did not use LUFA.
I also created a patchset for libc, avr-gcc and binutils to support
the ATXMega16. My idea was to use the dfu-bootloader and
dfu-programmer but since I do not need to update the firmware every
now and then I dropped USB support.
My board:
http://ed-solutions.de/dokuwiki/hardware:misc:xm16a4u:dev
I can send you my code if you want.
Regards,
Alex