While wp-texturize explicitly makes use of numerical entities for special characters, the php code of WP still utilizes named XHTML entities, the most common being » . Though this poses no problems with a vanilla WP installation, it is quite a nuisance when one makes use of plugins to have one's blog served as application/xhtml+xml. While Opera and Firefox don't care, browsers like Safari and Camino get rather pissed when encountering named XHTML entities resulting in xml parsing errors (see http://fmf.nl/~gmlk/humbug/2005-06-17.pdf for an example).
Of course, in theory, there is nothing wrong with named entities in an xhtml+xml document, but in practice quite some browsers can't handle them. I think a simple search & replace to replace all named entities with their numerical counterparts in the php code would take very little time and would make quite some puristic people very happy :) .
