What is W3C Validation? To understand W3C validation, first you got to understand what W3C is. W3C (short for World Wide Web Consortium) is an international consortium, where a group of experts, the public and it's staff work together to deliver and maintain standards on the world wide web, called as "Web Standards". More details on the W3C consortium
here.
The W3C was started way back in 1994, by
Tim Berners-Lee (founder of the World Wide Web) and a few colleagues who created W3C as an industry consortium dedicated to building consensus around Web technologies.
The consortium has a set of guidelines or technical specifications specified for all languages known to the world wide
website deisgn platform. You might be aware of the popular languages like HTML, XHTML, CSS etc. For each of them the W3C have specified their technical guidelines, which more or less are like the official vocabulary for these languages. So anyone who uses these languages on the world wide web are supposed to abide by the specifications and follow the rules of usage.
So W3C validation is actually the process of checking and measuring if one of the specified languages (like HTML, CSS, XHTML) is abiding by the technial guidelines and if yes, by how much.
The ree tools for checking the W3C validation is available
here.
If you are a
software development team, you might want to check the
specifications W3C suggests for each language. By practice, it is suggested that every coder/programmer abide by the W3C specifications in every language they are using.
Images courtesy - W3C A. Is your website W3C Validated? a. What does it mean to have your website W3C Validated? To have your website validated means to have your website checked for it's complacency towards the W3C standards. Using the
W3C validation tools, you are able to check how valid your codes are, what errors are present and how can you correct them. Once your site is validated completely for no errors, it means that your website will behave the same way or show up the same exact way as it was planned or designed on most of the standard web browsers (like IE, Opera and Mozilla Firefox) available today.
B. Webmasters – Should this be a large concern of you? a. Do I really need my site W3C Validated? This is a very often asked question. Many a times web masters think that having a beautiful design is enough to make their websites "standard" and "professional". Unfortunately, the reality is far from it. The reason is that your website is not only what it is seen like on the browser, the code that's behind it matters equally. The W3C validation checks if the code is in accordance with it's specifications depending on the language used. And if not, the website would not be considered as "W3C valid" even though it's a kickass design there.
There's another whole new perspective to this, when you are into
search engine optimization, and want your site to rank high for certain keywords on the search engines like Google, Yahoo and MSN.
Search Engine Spiders checks every website they visit for W3C validation. In fact, if the website is in compliance with the W3C specifications, then it's easy for the search engines to grab content from the website and accordingly place them in their index. The search engines are built the way W3C specifications are, so they are going to look for those metrics on all the websites, and if they are present on a website, that makes them "preferable" compared to the rest.
b. If I don’t have it W3C validated will it hurt me?...if so how We've seen that W3C non- compliant websites are hurt in the sense that they miss out on many opportunities. If two websites rank exactly the same and one is W3C compliant; chances are the W3C site will rank better.
C. How to correctly validate your website with W3C So, let's see how you can check if your site is W3C validated or not.
a. Step 1 Go to the MarkUp validator tool here (see screenshot). 
There are three options on the Mark Up Validator tool that you can use.
i) Validate by URL - Check validation by giving in the direct URL of your website or webpage
ii) Validate by File Upload - Check validation by directly uploading the file to be validated
iii) Validate by Direct Input - Check validation by copy-pasting the entire code If you have the webpage to be validated already hosted and live on your website, just opt the first option (default) and provide the URL of the webpage and click "Check".
You can also add more options by clicking on the "More Options" link, where you can suggest the markup type etc. You can always leave it to default settings, which will automatically detect the setting of the page.
b. Step 2 On clicking "Check", the validator tool scans the entire code on the file/webpage url/uploaded file for errors. It might take a while but after the check you should (in most of the cases) see a screen similar to the one below.

If you have a fully valid code, a screen similar to the one below will be shown.

c. Step 3 If you have failed validation like in the first picture, if you scroll down, you'll see all the errors highlighted in red with the code shown clearly, like in the picture below.

If you are a coder, you should be able to find out the error code, as it can't get simpler than this. Because all the errors will be shown with the line number in place so, it shouldn't be a problem for you to find it on the code. Now, edit the code and re validate the code by following step a through step c. We recommend that you re validate the document/code as much as possible until you get a "green signal" from the validator, which means that you are good to go. D. Summary Although the validator tool helps you with mathematical precision in standardizing your code, there is no thumb rule to it and you can take deviations, provided you know what you are doing.
Our advice to webmasters is to always try and produce W3C compliant, valid code, because we have an option here to check if we are good quality or not. If you are good quality, it shows. And you don't want to miss out on anything, just being lazy. So, happy validating your code !