What’s the need for XHTML?

Question

Because it is valid XML. That helps a lot since you can use a lot of tools originally designed for XML, such as XML parsers, XSLT, XPath, XQuery, …

Normal HTML is a SGML dialect and that is not parsable without knowledge of the schema.

<ul>
    <li>one
    <li>two
    <li>three
</ul>

is correct HTML but not correct XML. If you want to parse that, you have to know that ul-elements have to be closed but li s don’t.