I tried to seek backwards 7 seconds while watching a DVD and Xine often would seek forward slightly instead. After the backward seek that went forwards, repeated backward seeks seeked to the same point. I've seen the corresponding behavior trying to seek forward. The now removed xine 1.0.1-r4 does not have this seek problem.
This is an issue known to upstream, it's basically a two sided coin: the seek happen a the nearest keyframe for the given seek required, if the keyframe is forward, the seek seems not to work.