XML + XSLT already works quite well in major browsers, so the only reason to avoid creating content as you've posited would be spidering with some SE's (I somehow doubt that Yahoo has embraced this format, though I may be wrong).

I have not tested across Google, MSN, and Yahoo for regular content pages, however, I like to style my RSS feeds with XSLT (why bother having a news page *and* an RSS feed?) and I have not noted any problems there.

Google Base's flexibility should demonstrate Google's willingness to embrace "the future" - though I have a hard time seeing XML + XSLT catch on across the board any time soon. Putting together a functional and valid XHTML document or XHTML-generation application without abstracting the content and presentation is hard enough for most as it is.

The benefits - simplicity, reduction of irrelevant markup, semantic correctness, metadata inclusion - of moving to pure XML are definitely worth the effort, especially when the potential for sites to adopt standards which allow search heuristics to immediately identify key data comes to fruition.

Update: I might add that everything old will be new again in the blackhat arena - I'd expect that keyword spamming, tag spamming, hidden text, and all the other old tricks will see the light of day again (though I'd expect they'll also earn penalties faster than ever).

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Dan LeFree | Product Manager (Linux VPS Hosting) | Owner/Operator (Web development, marketing)