Validator problem?

Is there a problem with testing local files? I'm getting incorrect  
errors for pages on my development server. (No character encoding, 3  
errors, and 1 warning no matter what I try to test.) I know the  
results aren't accurate because all of my pages do have character  
encoding and the validator is also showing results for HTML 4.01  
Transitional while my work is XHTML.

I get the same results if I upload a file or use "Test Local HTML" in  
Firefox.

Thanks,

Dennis A. Coyle