I did server side browser sniffing to give IE the version it understood (IIRC it couldn't handle well-formed XHTML served with the proper mime tag, not sure, it's been a while :D) while everything else got proper fully compliant XHTML. I'm pretty sure I used a code snippet from Anne van Kesteren who is also posting here ;)
FWIW, maybe I'm the 1% but I wrote valid XHTML 1.0 for a while, but also soon gave up :P