What I say is: use Atom, unless you’re making a podcast. Unfortunately, Apple ruined everything there by choosing RSS even though the clearly-superior Atom was (just) published by the time they released their software, and subsequently continuing to not support Atom. Most other podcasting tooling also doesn’t support Atom. But every other application of feeds supports Atom just as well as RSS.
How about Atom? Only once, in a brand new client, and that was promptly fixed when I reported it, because it was clearly and unambiguously a bug, and you were guaranteed there would be no negative side-effects, because the behaviour is actually defined, and consistently implemented.
As for functionality, I certainly see articles from time to time that are courageous enough to use basic inline formatting in their titles (bold, italics, code), and you can’t do this in RSS (there’s a small chance it’ll work—probably a bug; a fair chance the markup will be presented verbatim—probably the most reasonable choice; and a fair chance the markup will be stripped—kinda problematic); but you can in Atom (because the title is a text construct like the content and you can specify the type), and it should then either work properly, or (unfortunately more common) be safely stripped by unimaginative clients.
Besides there is no guarantee that people wouldn't mess up their "Atom" feeds with similar issues and complaints that their feed doesn't validate won't sway them any more than their RSS not rendering correctly in your reader.
RSS vs. Atom is really the same situation as HTML vs. XHTML. For hypertext people have generally accepted that you need to deal with what is out there and decided to standardize how to deal with garbage in a consistent way instead of asking the world not to produce garbage, which is futile. It seems Atom proponents still need to realize this.