Points of view
Both NPPL and Xball are in a building process, each trying to grow as fast as possible. Which one will "win" is still an open issue.
Xball has great possibilities but I'm not convinced it will become the dominating format in it's current state. I think we'll see some changes to the format, particularly in Div I/II/III. One reason for this is the limits imposed by the tournament structure - the knockout format limits the number of teams that can reasonably participate in each division and, as larger divisions require more games per team, the costs (paint) grow pretty quickly. Most lower level teams won't be able to afford the costs of a full 24 team division in the current format (primarily the one hour game time). I've heard suggestions for changes to the lower levels, including mercy rules (similar to a majority decision in wrestling), shorter game time and changing to a 'best of x' format. All of these could make it more attractive for lower level teams to play.
Getting back to the original question, the pros will go where the money is. Whether this is as a team (All-Americans, Ironmen, Shock, etc) or as individuals on a new team (Detroit Thunder), if NXL makes it worth their while, you'll see the top talent migrate there.
I don't think the NPPL will fail if the Dogs go to NXL. We'll probably see Dynasty continue to steamroll most teams, with some competition from overseas (Ton Tons, Legion, Nexus, Joy Division). If no real competition emerges, Dynasty may either break up - joining the NXL individually - or move to the NXL as a team. The reason for this is simply competition. These guys didn't get this good without being fierce competitors and eventually they'll want to play the best. As far as the rookie/nov/am teams go - given the quality of the reffing, fields and event, there will be plenty of teams attending even without a 'real' pro division.
Another possibility is a migration of talent in the other direction. As Xball is geared towards a particular type of player (small, fast, aggressive = those darn kids
) we may see some of the older, I mean 'more experienced' current NXL talent moving back to the NPPL. Also, if NPPL is the first to score big with TV, we may see entire teams moving to where the money/fame/TV is. NPPL made a good first move with the Fox Sports deal. Now if they can get someone like SK or Rocky on "Best Damn Sports Show"...
PS - As far as the AA league goes, given the individual nature of the sport in general and Xball in particular, I think talent will be found where ever it is. Whether they're in Div I/II, 10 man or 7 man, the really talented individuals will be pulled up to the pros.