I use XHTML and CSS on all of my sites. At the very least, I think you should be using HTML 4.
The reason mentioned in the article for using HTML 3.2 was that spiders had trouble with anything later. I don't know why anyone would use HTML 3.2 now, since spiders seem to have no problems with HTML 4 and XHTML 1.0 (at least in my experience).
in all practicality, it really doesn't matter at all. many large sites don't even have a doctype declaration. the most important thing is to keep your code clean, well organized and easy to edit.
the main reason i prefer xhtml is because it gives me much more power to control all of my presentation with divs and css, therefore not only is the code very liteweight, but it is also much easier to adjust the look of my site. I will say though, most of this can still be acheived using html4. Sometimes I find it preferable to use html4, because other people may be contributing to the site, and they have no concept of xhtml. There is NO rule saying ALL sites should be done this or that way. You should assess your particular situation and make the best decision accordingly.