I searched but didn't find much related to serving xhtml as application/xhtml+xml and having it work in IE. I found this article a few days ago (while wondering how to serve xhtml properly, so that IE6 doesn't attempt to download the document).
My question is "why hasn't this been featured properly in the default template?"
Since Wordpress is all about compliance, I guess we owe it to WP to make our documents REALLY valid. The article explains how to serve a document in XHTML with the proper mimetype of application/xhtml+xml (if the browser supports it) or in plain ol' HTML strict as text/html.
If anyone wants to add this functionality, you just have to save the script into a file called 'mimetype.php', then include it in your template instead of the html element tag. Like this:
<?php include (TEMPLATEPATH . "/mimetype.php"); ?>
<head>
...
</head>
<body>
...
</body>
</html>
I'm currently using the 'fix'... and so is the guy from the article, so I feel if there is a workaround for the IE issue, lets use it.