We also have xenons (Kichler, 12v direct wire w/ 18w xenon bulbs - about 7 units installed under our cabinets about a year ago) and, while the cabinets directly above do get warm, they do not get hot. That's to be expected given that these are incandescents and will produce heat that will be absorbed into the cabinets if left on for long periods. Ours are not dimmable but they do have a high/low switch and we keep it on low - unless the lights are being used to illuminate a task. Will they damage wood cabinets? That depends on the wattage, the transfer rate of heat to the wood (which could be influenced by the design of the fixture and/or how it's mounted and the degree of air circulation) and how long the lights are left on. It might be enough to discolour some finishes or even bubble up some veneers directly above the lights (depending on the adhesive used - but I would expect that this would be extreme) but I wouldn't worry about anything truly wretched here - provided the light fixture is not overly enclosed. Last year, I spoke with our cabinet supplier about the choices and they overwhelmingly recommended xenons. FWIW

We did one for each - not a big deal to install a few more when the wire is coming out of the wall. We didn't do them on two cabinets as they were stand alone and not worth the effort but one ended up where our tv is so in the end we didn't need it there anyway. You are better off overbuying than underbuying and returning. Just make sure to measure the cabinets under (and include trim) and get the best fitting if you don't have them picked out. We also found that a true electrical store had better electrical supplies/lights/price (where the electricians go) than a lighting store or HD/Lowes.

Your cabinet maker or a carpenter will able to run a piece of trim around the bottom of your upper cabinets to hide shallow undercabinet light fixtures. Just prime and paint it to match your cabinets. Since the bottom of your oversink cabinet is higher than what it is in between, you could make that piece of trim a bit bigger on its exposed side so that the light fixture would be masked from lower angles. By the way, your kitchen is wonderful.

acm: We will have "can lights" of a sort in the space, but as I said, they will be 11 feet up, and the ceiling is angled, so it will be wash lighting, not task lighting. We are specifically seeking light that will be able to be closer in and won't be able to be easily shadowed by heads, which is the benefit of under cabinet lights, ya know? jslazart, I was wondering about something like that coming off the side wall. Even thinking about something like this, this, which could be moved out of the way or directed as needed to where you are working, but wonder if it would look too busy: I have yet to see a kitchen quite like ours, but will see if I can grab a good angle of what I am working with in Google Sketch Up to show you what I am working with. Thanks for the responses!