Yeah, I have the site running on xml doc type and there are issues with code generated by DNN (meta tags, form tag and a few others) but the menu seems to work fine.  I guess to keep things looking like it should, I probably either have to go with a tabled container or find a way to determine when the menu is shown so that I can hide the menu container when it is not.

Update:
----
I have found a few interesting sites for those following this path:

http://www.xhtmlskins.com/FreeSkins/tabid/475/Default.aspx

http://www.powerhousedata.com/Default.aspx?tabid=68

http://www.obrienit.se

-----

It seems there is another problem with my skin now, where the visibility selector does not seem to work on modules.  I isolated it to the skin, so there must be something out of wack there.  Hopefully, that will be quicker to find :)

While this was not quicker to find, for those that are running into this problem, it is bug in the dnn.js file when using an XHTML doc type and collapsing modules.  It is current labeled as fixed for 4.5, but if you cannot wait, here is a patch:

http://support.dotnetnuke.com/issue/ViewIssue.aspx?m=1&id=5114