I haven't found whtml at http://github.com/nex3/arc/tree/master/lib/ yet. I did however just stumble upon sml.arc by akkartik, which appears to be super relevant to this discussion.
It looks like it's function based and works on simple lists, so it would probably be conducive to the quasiquote form of escaping to arc. Anything seem to be missing from sml.arc that you wanted in your new version? Personally I think the interface could use some work, but that's about it.
Hmm. I'll have to see if I can find it elsewhere. I guess that w/html must have been a macro that bent quotes to its own purpose, whereas marcup or your 'tohtml merely take lists as input.
sml.arc sounds familiar; I vaguely remember someone else going through a discussion similar to ours, in which SXML was also mentioned.