> My interpretation is that the XPath data model simply does not allow 
> unresolved entity references,

agreed.

> and therefore an XSLT processor or any 
> other thing built on top of the XPath data model must use a parser 
> that resolves entity references.

I'm not sure that follows. Is it clear that generating a fatal error on
an undefined entity reference (which is what mozilla does) is not
allowed.

David

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