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Xephyr isn't a window manager. It's an X display server that runs inside a window on another host X server.

Xephyr is just for testing. You can run wtftw completely standalone when you use it in your .xinitrc for example.

It's still a bit buggy though. Works perfectly fine here. Been using it as my default WM for 2 weeks straight now. But some bugs do seem to creep up on other machines.

That's just for testing.