Jeff,
Actually Marcus and I don't disagree on this at all. It is just that Marcus is talking about a business entity and I am talking about a relational entity. That is a problem in our discipline, the same words mean different things in different contexts. In relational database theory an entity is a person, place, thing, or idea about which we need to record information. In this context the Vendor is an entity and the address is also an entity, the combination of a vander with their address is a business entity. In OO design we deal with business entities, in relational database design we deal with relational entities.
RI is a factor of relational database design. Using a heirarchal database design precludes any concern for RI as there are no relationships to manage. However, the methods for protecting the RI in a relational database are often dictated by business rules and so the confusion as to which layer to put the code.