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That said, you don't want a critical error stopping all or some of a page from being indexed. 231 errors might seen daunting at first, but as you work through them you'll probably find that many are of the "cascading" variety -- fix one and it will clean up 20 or so others. So, fix the first error, revalidate, rinse, repeat.
How much you should worry about errors would depend on what the errors were. Some issues flagged as errors can be safely ignored (ampersands or other characters in URLs, for example) but some types of errors could cause a spider to miss or misread some of your content (not closing a tag properly, for instance). Fixing such errors if you had them could indeed help your SEO.
Line 16, Column 125: there is no attribute "text"
…></head><body bgcolor="#ffffff" text="#000000" link="#0000cc" vlink="#666666"
Is the validator saying that the text attribute shouldn't be used in the body tag anymore? If so, is it a big deal if I leave it there?
Your HTML will then not be cluttered with style information.
Your HTML will then consist of only headings, paragraphs, lists, tables, forms, images, and links, and maybe a few div and span container tags.
How much easier is that to code and to read (and correct errors in!)?
If you work in quirks mode without a valid doctype, you'll always be adding hacks to get browsers to play along. By using a valid doctype and validating, you'll be in standards compliance mode and will find many cross browser problems go away.
Not yet mentioned is the fact that the W3C validator will cascade errors - you may only have 10 real errors but this can kick of other errors when it interacts with elements later in the document, and may wind up with a report that says 200.
It's telling you "text" is invalid because all of these attributes are deprecated for the selected document type:
<body bgcolor="#ffffff" text="#000000" link="#0000cc" vlink="#666666">
in favor of
<style type="text/css">
body { background:#ffffff; color: #000000; }
a { #0000cc;}
a:visited { #666666; }
</style>
.........
<body>
Start by using the right document type [webmasterworld.com]. Time and time again I see XHTML doctypes in place where they're not remotely necessary.
There is little (or NO!) need for XHTML usage for most sites. It is extra complication and hassle for no appreciable benefits, and comes with several major disadvantages.