Understanding the Paoli proposal

At 02:11 PM 12/13/96 -0800, Jean Paoli wrote:
>this is why I was saying that the current XML spec was more convenient
>that the one I proposed in my mail: every application can decide how to 
>deal with this. The authorial intent  has not been expressed here.

I'm getting lost in all of these proposals and amendments. If I want this
paragraph to look "right" in all applications, what do I do:

<P>If I want this <B>paragraph</B> <I>to look right</I> in all applications</P>


<P -XML-SPACE=PRESERVE>If I want this <B>paragraph</B> <I>to look right</I>
in all applications</P>

My understanding is the latter, because the former gives applications the
right to "arbitrarily" remove whitespace, and between the B and the I might
well look like a reasonable place to do so.

What happens if I turn "on" PRESERVE mode in element content. Should a
validating parser tell me that my authorial intent is in contravention of my
DTD? Should it just silently eat the whitespaces despite my authorial
intent? Should it return a grove that is not valid according to the DTD?

Thanks for any enlightenment,

 Paul Prescod