I propose (this does not necessarily represent editorial consensus) that
we accept this comment and delete the offending clause without replacement.
If this change is accepted, the paragraph which currently reads:

    Note that this grammar requires the number of non-whitespace 
    characters in the ·lexical representation· to be a multiple of 
    four, and for equals signs to appear only at the end of the 
    ·lexical representation·; literals which do not meet these 
    constraints are not legal ·lexical representations· of 
    base64Binary because they cannot successfully be decoded 
    by Base64 decoders.

will read:

    Note that this grammar requires the number of non-whitespace 
    characters in the ·lexical representation· to be a multiple of 
    four, and for equals signs to appear only at the end of the 
    ·lexical representation·; literals which do not meet these 
    constraints are not legal ·lexical representations· of 
    base64Binary.

+1.  The proposed change looks good to me.

Noah

(In reply to comment #2)
> +1.  The proposed change looks good to me.

Ditto.

 "Equals sign" (vs "equal sign") jars me, but I see that that's what Unicode documentation calls it.  

On today's WG call, the XML Schema Working Group agreed to the proposal
in comment #1; I am marking this issue resolved to reflect that.

Michael Kay, as the originator of the issue, would you report back to QT
on this resolution and let us know whether they accept this resolution of
the issue?  If they agree, please so indicate by changing the record's
status to CLOSED; if they disagree, REOPEN it.  If we don't hear from you
in a reasonable amound of time (say, two weeks), we will assume that silence
implies consent.