Can someone please explain to me how come the default value I have set in
abc.xsd doesn't get into the abc.xslt? If I understand it correctly, I should
get a result text file of 'bbbbb' but it comes out empty. If I use abc2.xml
I get 'aaaaa' which shows the example works but not the default value.

Make sure the schema is used by the parser, e.g. turn on validation.
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Oleg Tkachenko
http://www.tkachenko.com/blog
Multiconn Technologies, Israel