Myself, the W3C TAG, and much of the web and xml communities have been quite concerned about TAGSoup for quite a while. The obvious thing to me seemed to support namespaces in HTML5 (like Sam Ruby's namespace proposal) and then have browsers implement HTML5 or at least the namespaces part of HTML5. Right? IE 8 beta 1 has done things a little differently than that, and Sam's response to my pleading with HTML5 about namespaces kicked things up a notch. It resulted in some heated discussion (I'm quite aligned with Robert's points about HTML5 process) but positives in use cases from Henri and some expression of a lack of disdain from Hixie. This all moved to the HTML WG Mailing list with Henri's reposting of the use cases and SVG added SVG in inline HTML wiki. Issue #37: Integration of SVG and MathML has been opened. There are those who believe just integrating SVG and MathML into html is the right thing, and others who believe a general solution is superior, like Julian Reschke and myself. But I think that some serious analysis and use case fleshing out is needed to see whether the specific or general solution is appropriate for HTML5. I'm not sure if another issue should be opened for the general purpose case, but at least SVG and MathML are being talked about now. (I pat myself on the back for the tiny little nudge that I did :-))
In an irc chat of Chris Wilson's office hours, there was a fair amount of discussion of all of this. He intimated that the new namespace support wasn't that big a deal or innovative as it might seem. The bigger deal around namespaces is the binding api for dealing with namespaces. I asked whether the current subset is fixed in stone or mutable, and he did the expected thing and said they are always interested in use cases.
I also learned that there are many complications... Heavily related is the issues of HTML, XHTML, XML, DOM level 2 implementations, MIME types and more. I'm still coming to grips with all this, though I probably never will. Hixie wrote a great paper on why serving xhtml as text/html is harmful. A December 2006 article by the IE team stated namespaces in html: too much trouble to bother with.
A cool tool is the zombie DOM viewer, and here's an example that shows <html xmlns:foo> inside a body, which is trick that I just learned on how to do namespace prefix declarations inside an html document.