The xine player does allow streaming of media to several destinations, and has for as long as I know (I used it first in at least 710). But it is out of sync. Near perfect sync can be achieved, the squeezeboxes do this, but the xine player has no special handling to maintain sync.
And not all media formats works. I think this has to do with the "streamability" of a particular format and xine's support for that format. It might be that a newer xine version would help in this regard.
The xine player uses xine's slave function, where one xine outputs the stream to a network port, which other players can access using a slave://192.168.80.1:xxx/something url.
If the media stop after the first track, I would file a bug report for it, as that would seem like a bug.