Web standards and code validation can often be a boring subject in the SEO and web development world. It’s not fun to hack through the W3C’s validation complaints about missing alt tags, improperly entered text symbols and incomplete div tags, but it is neccessary.
In a thread at SEOChat, several posters who are more informed than myself on the subject of validation note that Google does give a very slight preference to validated pages (and every little bit helps, right?). They also note that forgetting to inclulde a doctype in the header of a web page tells browsers to use pre-1997 html standards which, while still mostly compatible, can cause some errors.
It is NOT critical for SEOs to insure complete W3C validation on every page of every site they work on. The benefits to SEO and ranking are very minimal. What is critical is taking care to provide a usable and standardized experience for every user. This means testing your site’s functionality and visual layout with Mozilla’s Firefox, Opera, Internet Explorer & Netscape. It can be a pain, but the value is certainly there.
On the subject of validation, here are some excellent resources pointed out in the thread and other I have dug up myself: