Since His Holiness, Pope Benedict XVI is the Sovereign of the Vatican City state, why was he not in attendance?

As the event was not a state function (unlike the weddings of the Queen (when she was Princess Elizabeth) and Prince Charles, the reasons these were state events was because, at the time, they were heir-apparents, while William is second in line to the throne), not all state leaders were invited. European royalty was invited because, thanks to Queen Victoria's children marrying into practically all the royal families of Europe, they are related to the Queen and each other. Not all monarchs were invited, for example, the Malaysian monarch (who, like the Pope, is elected) was not invited.