The thing I like about the Xcursor image format is that it so extremely simple[0]. Every semi-competent developer should be able to implement a parser/writer for the format in under an hour.

But encoding the images with PNG does make sense, given the wide availability of libpng and the potential file size savings. I don't know how the feel about SVG support. One the one hand using vector graphics for cursors seems like a great idea but SVG is a very complex format, with the only real parser available being librsvg, which massively increases toolchain complexity. Too bad PostScript doesn't support transparency.

[0]:https://www.x.org/releases/X11R7.7/doc/man/man3/Xcursor.3.xh...