I have mixed feelings on this news.
On the one hand, I think it’s a good idea to focus on one X/HTML path.
On the other, I’ve been a part of the HTML WG for a little while now, and I don’t feel entirely happy, or comfortable with many of the decisions for X/HTML5, or for the fact that it is, for all intents and purposes, authored by one person. One person who works for Google, a company that can be aggressively competitive.