you don't make a symbolic link to xine itself. you make a symbolic link to the xine-mozilla plugin inside your browser's plugins folder.
Now imo, if you're going to use xine, i suggest not using xine's plugin. it's not in active development and when i used it, it couldn't handle those movies that made you do a 'click here to play movie'. look into using kaffeine and kaffeine's plugin starter. it's not as nice as in mozilla/firefox/opera, it won't play the media embedded in the browser (it does for konqueror). It will open up the kaffeine player. kaffeine uses xine.
Now if you have mplayer installed and working, you could look into the mplayer browser plugin.
edit: also, did you install codecs?
http://cambuca.ldhs.cetuc.puc-rio.br/xine/
you'll need the w32codecs to do wmv and quicktime.
to play all dvd's (well most all of them) you'll need libdvdcss.
http://ftp.freshrpms.net/pub/freshrp...t/9/libdvdcss/
to do avi's, i've been using divx.
http://www.divx.com/divx/linux/
also, what version of xine are you using? i suggest the latest xine-lib and version 0.9.23 for xine-ui.