Yup -- use it with my CDX2, love it.
Made the CDP sound smoother at the top end + tighter, more tuneful bass + much nicer to listen to on more complicated bits of music (things more seperated, less messy).
Never heard an xps2 in my house, but from what i remember of its effects from various store demos, the teddyxps is very, very similar, except in a much smaller / cheaper package!
Only caveat is that you lose a little bit of that Naim midbass warmth (bloat?), but given the some of my other kit (b&W 804s, nap 250.2), that worked out well for me.
Also, teddy's a great guy to deal with.