Well, the smart ones will start hitting Youtube tutorials asap, and getting to know one of the other softwares immediately.  If Autodesk has a heart, they will get together with Lynda.com or Digital Tutors, and offer transition courses to one of the other apps to qualified students.  The Dave School isn't just doing this because they are sad, they're scrambling to help because they were one of the only good schools that pushed XSI heavily for VFX, and students payed good money, and trusted that school to give them sound advice.  As far as I know, they continued offering XSI courses right up to the day it was announced.  You would think Autodesk would clue some poeple in.

If someone has a killer demo reel, it won't matter what software was used, because most studios are concerned with raw talent, and not the software.  Studios often train in-house anyway, and if they want someone's talent, they will make sure they are familiar with the pipeline.  NO student, looking to get into VFX, should have neglected to learn Maya.  Plain and simple.  If the person you knew didn't even try to learn Maya while learning XSI, then SHAME ON THEM!  Maya is the undisputed king of VFX, and XSI was used for specialized stuff.  No one should depend on the software to carry them into a career, especially in CG.  I have no sympathy for anyone who was using XSI, or any Autodesk product exclusively.  The signs and rumors that something was going to be gone soon were there for years.  No one company needs three heavyweight 3D packages, or could afford to support all 3.  Do you realize the man hours involved in programming all three of those every year with new stuff?  You Max users should be crying tears of sheer JOY right now, because from what I understand, Max hasn't had a meaningful update in about 5 years.

I think it's a shame mostly because I think XSI was the best overall software Autodesk had in terms of a solid, modular core, and great potential.  I'm sure they can fold it into Maya somehow, because Maya has a very flexible backend too.