>   The only place where the "my" prefix was used is the @name 
> of an xsl:function.  So I guess the processor is already an 
> XSLT 2.0 processor.  I guess the OP just copy and paste my 
> sample without adding the namespace declaration.
> 

The stack trace showed that he was using Xalan/XSLTC. 

If you specify version="2.0" on a stylesheet and submit it to a 1.0
processor, it runs in forwards-compatibility mode. This means that the
<xsl:function> element will be ignored; but if there's an XPath expression
that calls my:function without declaring the prefix my, it's quite likely
this will give a compile-time error.

Michael Kay
http://www.saxonica.com/