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The Datatypes spec is not clear about the interpretation of QNames without prefixes. There is simply a reference to the XML Namespaces spec. See: http://lists.w3.org/Archives/Public/www-xml-schema-comments/2001OctDec/0071.html
Henry's response: This should be clarified in the REC -- the intention is that unprefixed names are qualified iff there is a default namespace declaration in scope, i.e. as per element names, not attribute names, in XML 1.0 plus Namespaces. The definition should also make clear that the value space includes pairs of "no known namespace", local name, which correspond to unprefixed QNames when no default declaration is in scope. Resolution: Henry Thompson to draft erratum text reflecting discussion above.
At the face to face meeting of January 2006 in St. Petersburg, the Working Group discussed this issue. While there was some regret over the decision, in the end the Working Group decided not to take further action on this issue in XML Schema 1.1. The rationale for the decision (as I understand it) was roughly as follows. This item is similar in some respects to others (bug 2088, bug 2200, bug 2251, bug 2075, bug 2314); all involve datatypes whose values are in some sense correct only if appropriate declarations (or other constructs) are in scope. It would be good to have a clearer account of such datatypes, but while the lack of a clear account is highly visible in the spec, it does not seem to cause serious problems for many people in practice. Since we don't seem to have any immediate prospect of achieving greater clarity, and the problem does not seem acute for users, it seems unwise to delay Datatypes 1.1 for further work in this area. This issue should have been marked as RESOLVED / LATER at that time, but apparently was not. I am marking it that way now, to reduce confusion.