Using an XML declaration in an XHTML file

The XML declaration on the first line of the XHTML file:

<?xml version="1.0" encoding="utf-8"?>

Indicates the version and encoding of the document, however, this seems to cause IE to lose it's strict mode (reverting back to Quirks Mode), even though a correct DOCTYPE is included! This is evident in the box model, in that it reverts back to IE's traditional model! But then we know that IE doesn't support xml...

Quote from http://www.w3.org/TR/xhtml11/conformance.html ...

An XML declaration like the one above is not required in all XML documents. XHTML document authors are strongly encouraged to use XML declarations in all their documents. Such a declaration is required when the character encoding of the document is other than the default UTF-8 or UTF-16.

Further reading...