I think you are attacking it from the wrong angle by trying to encode all posted data.

Note that a "<" could also come from other outside sources, like a database field, a configuration, a file, a feed and so on.

Furthermore, "<" is not inherently dangerous, its only dangerous in a specific context: when writing unencoded strings to HTML output (because of XSS). In other contexts different substrings are dangerous, e.g. if you write an user-provided URL into a link, the substring "javascript:" may be dangerous. The single quote character on the other hand is dangerous when interpolating strings in SQL queries, but perfectly safe if it is a part of a name submitted from a form or read from a database field.

The bottom line is: you can't filter random input for dangerous characters, because any charater may be dangerous under the right circumstances. You should encode at the point where some specific characters may become dangerous because they cross into a different sublanguage where they have special meaning. When you write a string to HTML, you should encode characters that have special meaning in HTML, using Server.HtmlEncode. If you pass a string to a dyamic SQL statement, you should encode different characters (or better, let the framework do it for you by using prepared statements or the like).

When you are sure you HTML-encode everywhere you pass strings to HTML, then set validateRequest="false".

In .NET 4 you may need to do a little more. Sometimes it's necessary to also add <httpruntime requestvalidationmode="2.0"> to web.config (reference http://www.asp.net/whitepapers/aspnet4/breaking-changes)