XHTML is regarded as the next version of HTML. The need for a more strict version of HTML was felt primarily as now web content needs to be delivered to many other devices (like mobile devices) apart from traditional computers, where extra resources cannot be devoted to support the generosities of HTML (for example, support for both upper-case and lower-case elements). The XHTML DTD is defined within the XML DTD to enforce the strict rules of XML.
Most of the recent versions of popular web browsers render XHTML properly, and many older browsers will also render XHTML as it is mostly a subset of HTML and most browsers do not require valid HTML. Similarly, almost all web browsers that are compatible with XHTML also render HTML properly. Some say this is slowing the switch from HTML to XHTML.
XHTML's true power is realized when used in conjunction with Cascading Style Sheets. Although HTML can be used with CSS, XHTML moves to force its use for layout and style. This makes the separation of content and form an integral part of the web page's code.
The changes from HTML, to transitional XHTML, are minor, and are mostly just in conformance with XML. The most important change is the requirement that all tags are well-formed. Additionally, in XHTML, all elements must be lowercased. This is in direct contrast to HTML 4.0, which prefers that elements are uppercased. In XHTML, all attributes, even numerical ones, must be quoted. Attribute minimization (i.e., <table border>) is also prohibited. More differences are detailed at the W3C XHTML specification.