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The i18n Core Working Group published the Note Working with Time Zones: http://www.w3.org/TR/timezone/ where they discuss the difference between time zones and zone offsets(see section 1.2 Identifying Time Zones and Zone Offsets). Notably, it reads: "XML Schema only supports zone offset, but, confusingly, calls it time zone, see for example section 3.2.8.1, lexical representation in [XML Schema]." From my understanding the assertions they do are correct. Maybe this should be fixed in 1.1? A careful rename from "time zone" to "zone offset"?
Editors directed by WG this date to fix the wording where appropriate and explain exceptions with a note; result to be presented to WG via consent agenda.
Since this appears to be a question of clarity and proper usage, rather than a question of changing the substantive rules of the spec, I am (unilaterally) marking this issue editorial. This will have the effect of making it possible to deal with the problem later, after the publication of our next working drafts.
A wording proposal intended to resolve this issue has been prepared by the editors and was adopted by the Working Group on 5 September. http://www.w3.org/XML/Group/2004/06/xmlschema-2/datatypes.b4642.html As noted in the proposal (under "Status of this document"), most occurrences of "time zone" are changed to "time zone offset", a reference to the i18n WG Note is added, and a couple of erroneous notes about the indeterminacy of time zone recovery in 1.0 and 1.1 have been dropped. Frans Englich, as the originator of this bug report, should receive email with this comment. If you would review the proposal adopted by the WG as a resolution of the issue, we would be grateful. If you are content with the changes made, please indicate so by changing the status of the issue to CLOSED. If you are unhappy, please let us know what is wrong and change the status to REOPENED. If we don't hear from you in the next couple of weeks (say, by 23 September), we will assume that you are happy with the WG's disposition of the comment, and will change the status ourselves. Thank you again for the comment and the pointer to the i18n WG Note.