The server will need to specify arbitrary content-types eventually, and that's way easier than supporting xhtml, so specifying an arbitrary MIME type seems like the obvious solution to me. Also, the official MIME type for SVG is image/svg+xml, so trying to use xhtml both for SVG and HTML seems like a fragile hack.
Thanks for the great replies- I was actually also wondering how the RSS feed in news.arc deals with this... Is there some hack in there for overriding the Content-Type or are web browsers more forgiving for RSS feeds? I couldn't find any specific handling in news.arc for this issue on inspection the other day...
Firefox's Live HTTP Headers plugin tells me that news.ycombinator.com/rss has "Content-Type: text/html; charset=utf-8". I imagine RSS clients are not very strict about what they accept.
