rmathew, take Hixie's rant seriously, and throw in a dose of Appendix C being a complete joke. The guidelines aren't really compatible with HTML, they are compatible, with most, but not all, browsers and depends on a bug in their HTML parsers! (Since in HTML a slash can end a tag, so <br /> actually means a line break followed by a greater than sign!
Browser implementations of XHTML (being served with the correct content type) generally suck too, Firefox turns of incremental rendering for example.
That said, XHTML is a nice language to work in, so you might want to write XHTML and transform it to HTML before it gets to the user (my CMS does that before I upload to the server).