One of these days I'll considering making a FAQ to answer the question. I've seen it pop up on a mailing list recently and I've gotten a couple of questions about it. (Apparently, some newbie fan was throwing around that there's going to be a "Xena" movie because they saw this page on Yahoo, which starts it all over again.)
Anways, to make a long story short---there is no "Xena" movie. Plain and simple. There's a lot of things that need to happen and right now, the movie climate is not warm to a "Xena" movie. The genre (sword and sandal), female action driven pics, TV to movie, etc just are not conducive to what Hollywood wants in a feature film.
Now, the more technical version...
Studios do market research to see what a movie will make at the box office (domestically, meaning inside of the United States). They analyize genre, talent pool, story, etc, etc and if the market is not warm to it, that hurts the bottom line of the budget. If a particular movie doesn't look like it'll fair well at theater, it'll significantly impact the budget (or lack of) offered to a particular film.
This was the case for the "Xena" movie. The climate is not warm for a genre film that might have gotten made five years ago when "Gladiator" was the rage. It might even get made if were not the fact that (1) it's a movie based on a television show and (2) had a primarly female cast. I'm sure the fact that Xena was killed in the series finale played a role in the decision making, because the idea of a movie was to bring Xena back to life (yawn). Which would have opened up yet more issues because movie goers don't exposition and don't like having to sit through a pre-quel of events telling them what happened in a TV series they probably never watched.
Anyways, there's also the issue of a dying fandom and the lack of the impact of the DVD sales. What fueled Universal's decision to jump feet first into making "Serenity" (the "Firefly" movie) was that the DVD sales were very good. VERY GOOD. It showed there was an interest. But the "Xena" DVD sales? They were margainlly successful, but they didn't set any records nor did the crack the top 50 sellers of the week of release.
Are letter campaigns helpful? I do not know. But the fact that both Universal and Rogue Pictures told Rob to "show us the money" is a clear indication that the studio(s) are thinking clearly and not willing to get soaked by another TV show to movie catastrophe.
If you want a movie? Plead for a cheap TV movie or a direct to DVD movie like what is happening with the "Stargate SG-1" franchise.
But at this moment, the movie is pretty much a backburner item for Rob. He's more focused on Ghost House Pictures, getting the movies ready for pre-production and working getting a new CW series off the ground.
And that three to five years is quickly running out.