Well thanks. I will keep them separate.

Now since I have done a some testing I 've found a way that works to get the xs files in the same hierarchy, here it is for the reccord:

the makefile.pl in the main folder is unchanged except for the added parameter to WriteMakefile

 DIR => [qw(xs)], In the xs folder I have all the *.h, *.c, *.xs. typemap files.

xs/readme.pl is

WriteMakefile(
    NAME              => 'Win32::Shortkeys::Kbh',  
    OBJECT => 'hook.o Kbh.o',
    INC               => '-I.'
[download]

and the Win32/Shortkeys/Kbh.pm file is in the lib tree above this xs folder.

I can use makefile mantra from the main folder to compile, test, and it works.