How can I install Xubuntu (Xfce) in Ubuntu without uninstalling the Ubuntu-Desktop component. The same way as installing Kubuntu but having the option to change between desktops (KDE or Gnome). If I try to install xubuntu-desktop it tells me it wants to remove ubuntu-desktop and the notify-osd.
It's likely a conflict between xfce4-notifyd and notify-osd. Since notify-osd is in required by ubuntu-desktop, it needs to be removed. But removing ubuntu-desktop, does not mean removing the actual software. The ubuntu-desktop package itself is a meta package which is only there to ensure that all components are present. So, installing ubuntu-desktop will install firefox, for instance, but uninstalling ubuntu-desktop will not remove firefox.
I don't know why there is a conflict between those two notification systems, but that's probably something you should have a look at before you start, since notify-osd is rather cool.
As it has been mentioned it is because notify-xfce4. Personally I like it more than notify-osd, it supports themes, you can set the position and transparency of notifications, you can dismiss them and have actions on click. That said they are fully compatible, notify-xfce4 will work with Ubuntu desktop, and if you remove it later and reinstall notify-osd, that will work with Xubuntu flawlessly.