I'm curious:(Spoilers)

I think it was her spirit, but I don't like the idea of her sticking around. Gabrielle needs to move on. That would be hard with Xena sticking around. We know Gab had at least another kid later. She has human descendants, so unless Hope or the Destroyer came back, she has to have another kid. Again, that seems hard to do if Xena is around all the time.

As for why they killed Xena, I think it was supposed to be redemption through death, except they killed a lame way to go through with it. Basically it was all Xena's fault...for defending herself. O...kaaaay.

There was some talk of a Gabrielle series. However, Renee was pregnant at the end and, I think, like Lucy, she wanted an end. The series was mentally and physically tiring on both of them. They enjoyed it, but they needed an end.

-
Keevan - I hate Ferengi. *THUNK*
Star Trek: Deep Space Nine

Achieving redemption through death is a fairly common storytelling trope. Remember Xena was orignally slated to die at the end of her original story arc in Hercules. The character was always fated to die it just took six seasons of her own show to do so