Up until a short while ago I was still using local.xml for modifications to a project-specific theme, even though 1.9 introduced the theme.xml file. The scenario I encountered which forced me to ditch local.xml is pretty interesting and made me understand the need for the theme.xml layout updates.

Basically, I was working on a website that now wanted to expand in a different country. The new store looked similar, but would have slightly different templates. Usually - in a similar situation - I would use a different theme under the same package (to make use of the “natural” theme fallback to “default”).

I couldn't use a different theme in this case because I was already using themes for certain pages that looked slightly different as a way to easily override template files without having to write any XML. (I was changing the theme in an observer event for specific pages.)

Then I tried using a new package. But that …