Use the MvcHtmlString as the return type like so:
public static MvcHtmlString XDropDown(
this HtmlHelper helper,
string name,
string optionLabel,
object selectedValue)
{
StringBuilder b = new StringBuilder();
b.AppendFormat("<select name='{0}' id='{0}'>", name);
b.Append("</select>");
return MvcHtmlString.Create(b.ToString());
}