I just hacked together a quick and dirty RSS theme in CAREO. Doesn't do a heck of a lot yet, but it's been a real eye-opener on what else will be required in the theming engine.
Test feed is located here. It might be down, or broken, or whatever. It's waaay pre-alpha, prototype code. I'm subscribed to it in NetNewsWire, and will track it over the next few days to see how it works.
Also, they're doing a training session on ALOHA, so there's a lot of crap objects being uploaded as a result. So, you'll likely get exciting objects like "Test Object" or "Sample" or something similar, with tags missing (no description...) - that's the purpose of the training session, to get them to do it right...
The BIG thing I have to work on is support for namespaces in the theme XML fragments. The bits of XML that go into making up the themed component description are processed by XSLT, and I currently ignore namespaces, so we don't have to declare them in EACH and EVERY fragment. I might have to require namespace declaration in fragments, or maybe only for the non-standard stuff like RSS etc...