Yes, index/longindex optimization is nice and can be applied to xrange.  
However, I don't think python-dev will be happy with the 1546078-style 
changes going to 2.6 and optimization patches are probably premature for 
3.0.

The ssize_t approach has a nice property of not affecting 32-bit 
platforms where objects with offsets >2**31 cannot exist and will 
satisfy most of the needs on 64-bit platforms.

I cannot think of a use case for xrange output that cannot be used as 
index.  On the other hand, such functionality would be trivial to 
implement if needed by an application:

def range(start, stop, step): 
    i = start 
    while i < stop: 
        yield i 
        i += step


Maybe you could mark this issue as "easy" and see if the patch can be 
reviewed in one of the bugs days?