tjarreau, it's been two years since you started this thread. What did you end up doing with the yard? If you're still receptive to ideas, I second EasyTurf's suggestion. Artificial grass is worth consideration: it's low maintenance and is more functional than xeriscaping. (You can't play catch with your son on a yard covered with xeriscape.)
Regarding artificial grass's DIY'ability, that might be a problem if you don't have access to all of the proper equipment. To ensure that you encounter no hazards down the road, it is crucial that artificial grass be installed properly with no shortcuts; which is why we usually recommend hiring a professional. However, if you do have access to the proper equipment and feel confident, DIY'ing it is feasible. Installation instructions and videos can be found here, http://www.globalsynturf.com/installation/.