Well, i've only implemented something, not (re)invented. I don't know what CDXL is but I'm guessing it's video that played off of CD? The speed of the CD32's drive surely would have been a limitation without some kind of compression.
It was actually for the CDTV (4096 colours, single speed CD-Rom, 68000, etc) and was upgraded for the CD32's AGA chipset and snazzy double speed CD-Rom.
It doesnt have to run off a CD-Rom though but I know my CDTV couldnt cope with a 320X240 HAM video, it got 1FPS from the harddrive.(Or maybe it just didnt like Britney)