About updates:
Agree with aterrizando, updates are needed. I'm personally too enthusiastic about XStoryPlayer to have minded the lack of updates, but now that I think of it, on other Offbeatr projects that I have funded, the updates did matter when I formed my general impression of a project - it gave an impression on the "energy level", so to speak. It is of course unfair - you are spending your energy on coding - but that's how it looks. The update you are planning to do is great, but you should follow up with at least weekly updates. You have already posted a lot of cool stuff e.g. on the screenshots forum, why not use those also for the updates. E.g. the custom fluids stuff, and you could also use the stocks (pillory) picture and do a short piece on experimenting with user-provided models.
People rarely decide to contribute right away, but every time they visit the project page is a new opportunity to convince them to contribute. And a steady stream of updates (preferably with sexy pictures...) is a way to keep them coming back, and to raise their interest. I'm not sure whether the updates are emailed to all who voted for the project, but I would assume that to be the case, and so an update should generate a healthy spike in visitors who are potential contributors.
Remember also that updates do not have to be only about something you have already done, it can also be about something you are planning to do, as long as you can create some kind of preview or "artist's rendering" of how the feature would look like. Pictures are important! You can describe your plans and get people excited not only about what you have done, but what you are going to do. Obviously you don't want to over-commit here, but I'm sure there are features you are reasonably sure you can and will implement in the future that could be described in updates.
About website:
I think the current website is fine, and actually quite stylish when compared to the majority of erotic websites. Looks like somebody actually designed it rather than just threw it together. The current green-and-white-on-black-with-blue-accents design has a stylish, techie feel to it, which I think plays well to the technological superiority of XStoryPlayer compared to other erotic games. Disclaimer: I have zero knowledge of or experience in web site design, I just know what I like...
On a less serious note, since we are talking about the website, you might want to fix the rather "large" (in physical size, not in severity...) spelling error on the main page - it should be "an X Moon Production" rather than "a X Moon Production", since the X is pronounced "ex" which begins with a vowel. Compare with "x-rated":
http://www.googlefight.com/index.php?la ... x-rated%22