Hey Art,
I think you got it backwards!
Hp is about 10 times a large (based on market cap) than Xerox.
The conventional wisdom is that printers and toners make them a lot of money. That is no longer true. In fact, printers and toners have the lowest margins of all their divisions, and have been flat in margin growth (even laptops and computers have better margins for HP than printers and toners).
Over the past ten years they have lost their highest volume placements to digital copiers. They do not have "feet on the street", so the do not control any facet of MPS. Their prime strength is on retail (low margin), and major accounts (low margin).
Mark Hurd is a bottom line kind of guy. Don't look for HP to acquire. Look for them to sell.
It makes the most sense in terms of where the company is headed.
Canon has the value distribution (direct branches and dealerships ie "feet on the street")that HP lacks. It would make the most sense for Canon to buy their printer division.