Hear Hear. I've been waiting for RGBA and embedded fonts for years. Yes, I know I /can/ use it now, and /most/ browsers will accept CSS3, but that's not good enough for me. I see no purpose in adopting a standard before it has become standardised. So, Sir Tim, if you are reading this: hear my plea and please hurry up with CSS3. HTML5 looks interesting, and looks like it has lots of new toys, but that's no good if I still have to use image-hacks to form semi-transparent backgrounds and make items appear in the fonts I want.
On to the main topic, I see this as a great step backwards. Are people really that afraid of the X in front of XHTML? Or are they worried it's inferior because it has a lower number next to it? From the FAQ it does look like they aren't reverting to SGML which is a good thing, but makes me wonder what the point is. Surely then, this makes HTML5 XHTML2, and not the successor to HTML4.01.