My apologies for the ugly Xfree86 upgrade that's waiting in the repositories.
With XFree86 4.2.x we used external fontconfig and xft2 libraries to render truetype fonts. Then Xfree86 4.3.0 came out and used its own internal versions of these libraries, so we made the new X conflict with fontconfig, since both provided the same .so files.
Some users have been requesting that we rebuild XFree86 and link it to the (newer) external fontconfig/freetype2 libraries, rather than opting to use the internal ones. This gets tricky, because the old Xfree86 4.3.0-6 package conflicts with the fontconfig library, while the new Xfree86 4.3.0-7 depends on it. Pacman will not allow this upgrade.
To properly upgrade X, you will have to remove Xfree86 from your system, then reinstall it (you'll probably have to drop out of X to do this, btw). Don't worry about your /etc/X11/XF86Config file, it will stay where it is.
# pacman -Rd xfree86 # pacman -Sy xfree86