>At the very beginning of this thread I cited Abel Braaksma which
>answered this question. By the way, if you install MSXML6 on
>non-Vista, then it becomes the default for both IE6 and IE7 - if
>I understood him correctly.
MSXML 6 does not become the default in IE, it always uses version 3.0
for PI initiated transforms.

I have put online a test http://test.rudolphina.org/Test_IE.xml for a slightly
modified version of the stylesheet I posted a few days ago:
http://www.biglist.com/lists/xsl-list/archives/200706/msg00452.html
It demonstrates some surprising problems with MSXML3 and I hope
someone will test it with MSXML6 for a comparision.