> is it as bad as using li & ul to create menus

As a menu is semantically wise a list of links that somehow belong 
together I don't see a problem there. In XHTML 2 there will even be a 
navigation list (sic!) element nl.


> or using classes for non-css purposes?

According to the HTML Specs, the class attribute is not only for styling 
things, it serves as a means "for general purpose processing by user 
agents". And thats exactly what you want to do.

http://www.w3.org/TR/html4/struct/global.html#h-7.5.2


-- Klaus

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