Xubuntu team has decided to drop the CD version due to space constraints and move to 1GB ISO. CD are either way becoming obsolete especially on netbooks and new devices.
Another downside of CDs is that it can't include many useful programs and user need to download and install them manually. I install Ubuntu on people's PCs and it's really bad when you have to download needed applications one by one.
After a thorough discussion, which included the obvious drawback that will no longer fit on a CD and the amount of developer time currently spent keeping the ISO small enough to fit on a CD, the team decided that Xubuntu will have a 1GB ISO by clear vote of 8-0. The bigger ISO size will be featured starting from Raring, which is due to be released in April.