It seems from the WC3 website that you don't need the line, but it is encouraged.
An XML declaration is not required in all XML documents; however XHTML document authors are strongly encouraged to use XML declarations in all their documents. Such a declaration is required when the character encoding of the document is other than the default UTF-8 or UTF-16 and no encoding was determined by a higher-level protocol
http://www.w3.org/TR/xhtml1/ Not sure why the line defining that it's an xml file is causing the problem and I'm not an expert on xhtml, but I noticed that you are using the
XHTML 1.0 Strict version, so I'm wondering if all your xhtml tags conform to the DTD.
My understanding is that xhtml is not as forgiving as html, therefore you always need an end tag. i.e in html you don't need a closing </br> but in xhtml you must adhere to the xml format and every tag must have an end tag.
You could try validating the xhtml at
http://validator.w3.org/ or you could try changing from Strict to Transitional
XHTML 1.0 Transitional [ March 09, 2006: Message edited by: Jason Moors ]