John Coggeshall moved tidy [1] into PECL [2]. There is still some work to do for the Windows dll; more to come hopefully soon. From my point of view, this should not be an extension but part of the default function set in PHP. Having proper XHTML output is something to go for.
HTML Tidy, including both TidyLib and the command line utility, uses the W3C license:
That sounds not too bad and finally:
The copyright holders and contributing author(s) specifically permit, without fee, and encourage the use of this source code as a component for supporting the Hypertext Markup Language in commercial products.
From the legal side it should be possible to have tidy compiled into PHP. Please notify me if you have a different point of view.
[1] http://tidy.sf.net
[2] http://pear.php.net/package-info.php?package=tidy
