I just compiled the hg xine-lib 1.2 with SVN ffmpeg. In case someone is interested in the same, these are the options required for xine-lib:
./autogen.sh --with-external-ffmpeg
/usr/src/xine-lib-1.2# ./configure --help | grep ffmpeg /usr/src/xine-lib-1.2#
no need to use now --with-external-ffmpeg option for hg xine-lib 1.2
Goga