PottyMouth
http://devsuki.com/pottymouth
"PottyMouth transforms completely unstructured and untrusted text to valid, nice-looking, completely safe XHTML."
xilize2 - introducing version 2.0
http://centeredwork.com/xilize2
"Xilize is a way of generating valid HTML from ordinary text. More formally, Xilize is a markup language for generating XHTML and a translator for that language."