Chromeless requires you to write your apps in HTML5/Javascript, whereas XULRunner requires you to write your apps in XUL/Javascript. Given that HTML5 is a much more widely known standard than XUL, I'm glad that Mozilla is pushing forward with Chromeless and relegating XULRunner.

Ideally, Chromeless would allow you to take your webapp and (with minor modifications) turn it into a desktop app or vice versa.

Chromeless 'apps' or whatever are written in 'HTML5', which developers can be assumed to already know, rather than XUL/XBL which they can't.

I'm not too familiar with what xulrunner does, but this looks like it is very close to Air. Define a desktop application with html & js, but then have lots of additional hooks to make it a desktop app, playing nice w/ the environment.