I figured out why xmms wasn't showing up in the Simple Launcher list. The .desktop file was in the wrong directory. This can be fixed fairly easily.

First, open an xterm and become root. Then
I haven't figured out how to make the icon "pretty". There is a xmms icon but it's not being used for some reason.

EDIT:

I came up with another idea. Rather than moving the xmms.desktop file from its default location, I decided to create a NEW .desktop file that calls xmmsctrl instead. That way, I can still launch xmms from Simple Launcher. But now after I minimize xmms, I can restore it by clicking on the same icon.

Here's what I did. I installed both xmms and xmmsctrl. Then I created a new file "/usr/share/applications/hildon/launchxmms.desktop" with the following contents.
Note: You will need to be root to put this file in the correct location. I chose a stupid little icon from OS2008. Feel free to select another one. Also, I decided to have just the main xmms control come up each time. If you want the equalizer and the playlist to show up as well, append "equalizer 1 play_list 1" to the end of the "Exec=" line.

I've noticed that one big benefit of launching via xmmsctrl is that the playlist is preserved from one run to the next (unlike with the default xmms icon).