Hi,
I only suggest this as I had a similar problem from quite an old site I had to add to, I think I was using an older version of DW (MX?).
I have googled the problem, and there are quite a few threads where this crops up. There seems to be a concensus that this code is not necessary (or useful) unless you are serving the page as an xml feed.
This from one thread:
149487-tag-xml-version-1-0-encoding.html
Hopefully someone with a greater understanding of these things will be able to throw some light on it!