"This isn’t to say I don’t use XHTML. It’s a fine medium for further processing (e.g. applying XSLT). But it’s not right for serving up to browsers verbatim."
Couldn’t agree more. XML, and thus XHTML, is fantastic as part of a pipeline. XML processing tools let you add custom elements, metadata, display hints, settings and so forth and then a quick dash of XSLT gets you a finished render in HTML. Lovely.
After all, we don’t serve images on the web in .psd format, do we?