1. Feedvalidator has nothing really to do with iTunes. So iTunes will accept some errors that feed validator will not. Also, feedvalidator is outdated. Try either castfeedvaildator.com or
http://podba.se as alternitives.
2. RSS is just code so this is normal. RSS was never meant for humans, just machines. On a computer, RSS will render as just xml code in most browsers. This is normal. The RSS button will work on mobile devices.
If you want to make sure everything is ok.. Click the RSS button in Firefox. Firefox is the only browser that tries to make xml code look human readable.
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Mike
Lead Tech Support
Blubrry.com