Blitz, it's not as complicated as you might think. First for your fire control system what you need is a range finder and a ballistic calculator. The FCS of the XM29 and M25 are meant to add more features and have built in Zoom and IR vission modes. This makes them more like a one peice Solder digitalization kit then just a weapon. But if you take away the digital zoom and vision modes cut it down to a ballistic laser range finder, a calculator with preprogramed ballistics tables of ranges for preprogramed round options to do the trigonometry, Balance sensor to tell the system where it stands in relation to the desired angle and a simple interface to show the user to in high low and normal light conditions operate the system then you Can shrink it off the top of the system and make it far more manageable. Already there are 40mm sighting system in the market place, Wilcox RAAM for example.
next step is to integrate a interface to allow the user to program the shell with the desired range. Making the shell programmable is already established if you have a OICW program scaling it to a larger shell actually makes it easier. What you need is a is a system that allows you to range the enemy select from a preprogrammed option of rounds ballistics table's and in the case of a smart round tell it when to explode.
Most if not all of this is already in the works.
This seems rather complex when described but to the end user what it means is that there weapon lets say a M4A1 with a M320 would have mounted on side of the system via the Grenade launcher's Mil std 1913 rail interface. The system would powered by lithium ion CR123 batteries would be a little under 2 pounds and probably no bigger then 6inchs long by 3 inches wide by 4 inches high. The interface would likely be a USB cable port. A LCD screen, a switch that allows the system to be cycled through it's modes such as diagnostic, power save, ammo type selection, smart round. A lasing button a lock button to tell it that's what you want to kill, and two buttons, one to reduce the programmed range for airburst one to increase it. A display system probably LCD that lets the operator select his round's ballistic data, what range he has lased and what he is telling the airburst to explode at. Then a sight to he can aim and line up on target this could be as simple as a set of green and red LEDs like the F2000's system or a reflex optic on a mechanical gimbal.
User would select his round lets say for conventional mode a M441 HE grenade. He lases the target lowers the range desired to attack by increments of meters. The calculator does the trig tells him to aim up by a set angle. When he is on target the sight turns green he pulls the trigger on the launcher. The round archs into the target.
For airburst he loads a airburst round sets the system, lases tells the system to explode a meter above the ground 2 meters behind the target. The computer tells the round by Wi-Fi, the computer does the trig tells him where to aim he lines up and pulls the trigger and ruins someone's day.
The key advantages of the M25 and ZH05 is the flat trajectory. It allows longer ranges and more linear target attack. The key advantage of the 40mm is the wider range of rounds the established logistics and the higher explosive power. Both have advantages in some situations over the other. A flat trajectory for example might be better on targets in a building firing from Windows. Well the arching fire of the 40mm might work better on targets behind a wall. There is also work on 40x46mm UAV rounds and Self guided 40mm rounds.