XFree86 development happens on the trunk of the CVS repository with releases cut from this development trunk at the end of each release cycle. A maintenance branch is then created sometime around each release, which can be used for important post-release fixes and security updates.
XFree86 release cycles occur approximately every 12 months and coincide with the calendar year. For example 4.0 was released in 2000; 4.1 in 2001; 4.2 in 2002; 4.3 in 2003; 4.4 in 2004; 4.5 in 2005; 4.6 in 2006; 4.7 in 2007 and 4.8 in 2008. So it is safe to say that 4.8 will be released late in 2008.
The development phase typically ends 1-3 months before the release date and is marked by the start of a feature freeze . The timing of releases and the length of the release cycles may vary according to the resources available to The XFree86 Project, an entirely volunteer organisation.
XFree86 consists of full source code tarballs, plus full binary distributions for a broad range of supported platforms. Update/bugfix releases may be made from time to time as required and as resource availability allows. Such update releases typically consist of source code patches plus binary updates that may be layered on top of the previous release.
The current release is 4.8.0, and the next release will be 4.9.0. No update release is scheduled, but if one is needed it will be version 4.8.1.
Aside from releases, snapshots of the development trunk are tagged in the CVS repository at regular intervals, normally every two weeks. Each snapshot has an identifiable sequential version number. Further information about the latest snapshot can be found at the XFree86 snapshots page.