Will this validate in XHTML?
<span>hello<span>world</span></span>
Yes it will. You can help yourself by using the w3's validator direct input option:
<!DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Strict//EN"
"http://www.w3.org/TR/xhtml1/DTD/xhtml1-strict.dtd">
<html xmlns="http://www.w3.org/1999/xhtml" lang="en" xml:lang="en">
<head>
<title>Title</title>
</head>
<body>
<p>
<span>Test<span>Nest span</span></span>
</p>
</body>
</html>
Absolutely.
Here's the definition from an XHTML-strict DOCTYPE for a span element.
<!ELEMENT span %Inline;> <!-- generic language/style container -->
<!ATTLIST span
%attrs;
>
The "%Inline" part tells me that it can have child nodes from the "% Inline;" entities element list.
The span element is included in the list of elements classed as "% Inline", that combined with span allowing "%Inline" child elements tells me that span is a valid child of span.