Yea, I've been looking at that a bit...
The way it works, it uses lots of bandwidth. Instead of "draw a button with label 'blah'" it communicates like "draw a grey rectangle, draw another stroked-black rectangle 2px outset, draw the text 'blah'" (for a simple button). Not brilliant. Themes are client-side. A server-side X toolkit extension that X clients use (perhaps through e.g. a GTK+ -> X extension wrapper-job) would solve this, and it's something I was thinking about doing at one stage not so long ago.
Still, it's very cool the way It Works. I wonder how much money could be saved, and how more-pleasant the computers in our school would be if we used this approach with GNU/Linux. A few very good servers can't cost much more than the new computers they bought in a few days ago with Windows XP (because Windows XP is the next big thing).