You missed a third way. You can actually paste the SVG itself into the XHTML instead of a reference to the file:
Code:
<html xmlns="http://www.w3.org/1999/xhtml">
<head>
<title></title>
</head>
<body>
<div class="img">
<svg height="100" width="100">
<circle cx="50" cy="50" r="40" stroke="black" stroke-width="3" fill="red" />
</svg>
</div>
</body>
</html>