Found this out while testing DTM recovery. I didn't check other 10g releases, but Xid padding is a no-op with Oracle 10g release 10.1.0.3.0. Everything works with and without padding, even transaction recovery after an appserver (and transaction coordinator) crash.
It would be good to know exactly which Oracle releases require Xid padding. Maybe we can get rid of padding at some point.
We were going to move it to the jca layer anyway.