One of my client site is not doing well on W3C standards. I have checked in http://urloz.com and found that the site have 82 errors and 20 warnings on html validation and 1 errors on css validations. Although the site is ranking at 27th place in Google. Since last three-four months no improvement in rankings. Is the W3C affecting the site.
Well in this case, this is a high alert for you, for effective optimization, you need to have a perfect website structure, any html errors would surely going to harm you site rankings. Google loves clean and perfect sites.
w3c or html validation doesn't have anything to do with seo or ranking. i have seen plenty of sites that dont pass validation but rank high. it is however a wise idea to get the code validated if possible