> The main thing is that markup is parsed correctly and there is no data loss. 
> How can IE do this
> reliably? Because valid XHTML markup written to comparability guidelines is a 
> sub-set of HTML.

The main thing is, that if parsed correctly by HTML parser XTHML would
even "produce" more data,
or to say it more exact, browsers would show more. I mean an extra ">"
popping up for every <br />
and <img .../>.
Those compatibility guidelines rely solely on browsers failing to
implement SHORTTAG in correct way. Now, of course, is to late for
that, but see screenshot here:

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