> In all honesty, all you need is an XML processor that 
> supports Schema processing. You do not need any XSLT. But if 
> you are determined to use XSLT, just use XSLT 2.0 with 
> validation (available with Saxon-SA and AltovaXML, the latter 
> free). 

There's one little detail, you can't do this in pure XSLT because you can't
catch the exception when validation fails. But Saxon-SA does have a
try/catch extension that gets around this problem.

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