HTML Is Dead: Long Live HTML!
HTML5 is the long-needed update to the core HTML specification/standard, which has been stuck on version 4.01 for quite a while. The W3C has been most visible in promoting and developing the XHTML standard but that's not really taking off in a significant way and is almost always used incorrectly. For an excellent overview of the updates that will come with HTML5, read the article HTML5 differences from HTML4.
One of the key areas that HTML5 is meant to address is creating tags specifically for web applications. Drag-and-drop content, data grids, canvases and the like all give web app developers some semantic tags to use. I think the general clean up that all the tags are getting is great too.
What's interesting is that the W3C is not the originator of the HTML5 standard. Instead it was adopted from a draft created by the WHATWG, a group started by people from Mozilla, Apple and Opera. (You know, all the browser developers apart from Microsoft.)
The problem, of course, is that it will take time for any new standard to be adopted. CSS2 still has rather sketchy support in some areas. The other problem is that most of the things being introduced have already been "solved" by various parties over the years. Javascript frameworks in particular allow for easy achievement of some of the functionality. I suspect that the standard will mostly be used as a way to improve the underlying document structure and make it more semantic, rather than replace Javascript functionality.
Perhaps the biggest advantage to HTML5 is that it will make a much greater effort to specify exactly how rendering engines are meant to deal with some of the tags. Since it was started by browser companies this is understandable. Really, it is the poor specifications for engine writers in previous HTML versions that has resulted in the vast majority of compatibility problems we face today. With no clear rules, everyone had to kind of decide for themselves what the standards meant.
Overall, HTML5 will be a welcome addition to the web development world. Let's just hope we don't have to wait too long and there aren't too many problems facing it's introduction!
UPDATE: As some extra reading on this topic, check out a post by Ian Hickson (a member of WHATWG and Google employee) about [the current state of affairs for CSS][2].