Hi Gordon,
Thanks a lot. I can confirm .xhtml file extension is now recognized and working fine on my Moodle 2.2.1 with all navigation types in the settings.
Additionally, the mark up for my test file is XHTML5 with HTML5 video (mp4 and WebM)! Great job, Gordon!
Someone may want to test it in Moodle 1.9. and QuizPort.
Cheers
Stan