There's a huge thread about it at http://www.sitepoint.com/forums/showthread.php?393445-XHTML-vs-HTML-FAQ&highlight=html+xhtml
Basically HTML versions 2 through 4 are defined using the SGML standard while XHTML is defined using the XML standard (which itself is defined using the SGML standard).
HTML uses a MIME type of text/html
XHTML uses a MIME type of application/xhtml+xml
Also Internet Explorer 8 and many older browsers cannot process XHTML.