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Here is the specification that Dave Winer wrote for RSS 2.0:
[cyber.law.harvard.edu...]
It depends on the browser or feed reader you're using as to how they display. For example, all feeds look the same to me in Opera, but I know that FireFox and IE can also display feeds with their own XML stylesheets. You can write your own stylesheets or use the ones provided by services like FeedBurner that will display feeds like a webpage in your browser.
A lot of people seem to forget that an XML feeds can be read in a number of applications. Making an XML feed look pretty in a browser is a low priority for most. Heavy consumers of RSS will have their own apps to read your feed and never see all of your styling anyway.