You know how target="_blank" is invalid in XHTML strict? Well, this plugin uses a Javascript hack to get around this. The code was originally taken from this thread I came across: http://www.webmasterworld.com/forum21/11165.htm
For posts/pages, the plugin will automatically captures any target="_blank"‘s inserted by the WP editor and modifies them to keep the page XHTML Strict valid. Then some small Javascript is inserted into each page which re-inserts target="_blank" so that the functionality is restored after your page has been validated!
For non-post/page content (eg templates/widgets), simply give your outbound links a class name of external, and the rest will be done automatically while keeping your page XHTML valid.
Future things I plan to add: