Rowland, those examples are great. I hadn't gone as far as thinking about it
in conjunction with xml:lang. I think this combined with Ernest 'di'
(definition item) solution would make for a nice improvement to definition
lists.

Another option that gets rid of the need for an encapsulation option might
be to explicitly state which term a definition is referring by using an
element's id... maybe something like this: 

<dl>
  <dd refTerm="Foo2">bar1</dd>
  <dt id="Foo1">Foo1</dt>
  <dt id="Foo2">Foo2</dt>
  <dd refTerm="Foo1">bar2</dd>
  <dd refTerm="Foo1" xml:lang="en-gb">bar3</dd>
</dl>

Where the 'refTerm' attribute would reference a dt element's id attribute. 

Personally, I prefer Ernest <di> ... </di> solution: I think it's easier to
use, looks semantically and structurally sound, and inline with the way
other lists are constructed.

Marcos