1) Your site will be forward compatible. Sure, maybe a few things won't work in older browsers, but at somepoint you need to say NN 4.7 users, you need to updgrade. I mean really that browser's over 5 years old now.
2) It will force you to code more symantically correct, which will reduce backwards compatibility issues anyway.
3) It will enhance accessibility for users (see Section 508 / WAI)
4) It will most likely work on other media devices as well. (Palm Pilots, webTV, etc)
Is it compatible with most modern browsers? (Like IE 5 and better, and most recent versions of Netscape?). Because as far as know, XHTML 1.1 became a W3C recommendation fairly recently.
XHTML1.1 is NOT supported in any ie version on an platform if served as 'application/xhtml+xml' (which it should be).
It IS supported as 'text/xml' or 'application/xml' in iew, but only in the same way XML is. That is, ALL elements are treated as inline elements and have no default behavior or style attached to it. Which means that for example links and form controls act exactly like span elements.
It is fully supported by moz, op7, saf. I don't know about msn/osx, but brothercake could probably tell you whether or not that browser supports it.
(Generally, when we say MODERN browsers, we don't include four year old browsers like ie6w or earlier.)
Well, with the exception of it's modularity, no, it doesn't. If you write your own XHTML1.1 DTD though, it does.
The largest difference between 1.0 and 1.1 in practice, is that 1.1 MUST NOT be served as HTML (which mean you are not allowed to use the 'text/html' MIME type).
Before you post, read our: 
) is does XHTML1.1 have any advantages over 1.0?
