If we return back to the initial interrogation of Roger ("Kovid Goyal writes that the DOCTYPE is required only when there are named entities (like nbsp)"), I think the warning of the Kovid's Book-Edit module (when doing a Run check) provided a good explanation:
Quote:
Warning [...]
OEBPS/Text/auteur.xhtml
Named entities are often only incompletely supported by various book reading software. Therefore, it is best to not use them, replacing them with the actual characters they represent. This can be done automatically. <i> is mine.
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However, it remains to be seen whether the named entities really create problems, at least with digital eInk readers.