1. YES, It is possible and has been done by many developers and web designers including myself
2. Buy an XHTML/CSS skin --> click here

Hope this helps!

Cuong Dang
Co-founder: Enliven, dnnGallery
LinkedIn | Twitter
I'm the author of DNN and Web Standards Wrox Blox

Yeap, really easy to do actually, If you know CSS its actually easier to build a CSS based DNN skin then a table based one. Note if you want pure xhtml DNN you have to change a few other files, cause by default DNN doesn't render xhtml valid code. Its not too hard to do cause DNN only fails on about 5 things, mainly from it being lazy. lol

Make note most CSS skins use House of Nuke's Menu and you have to install the skinobject before parsing any html skins. There are only a few places to get Free / Cheap CSS skins as listed above. I am working on starting up my own portal were you can get free CSS based skins soon (lots going on in life but soon). If you goto DNNCreative.com they have a few free CSS skins you can use to start from and learn off of as well. If you are serious about learning to build your own CSS sites, that are xhtml compliant their tutorials have to pay :( are really good at showing you every step of the way. Even down to altering the html/textbox to use your own custom styles in the dropdown list.