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In XQUTS, all the queries under Queries/XQuery/UseCases have a (: start-indent :) ... (: end-indent :) section. Instead, the comments should be "insert-start" and "insert-end". e.g.: http://dev.w3.org/cvsweb/2007/xquery-update-10-test-suite/Queries/XQuery/UseCases/AddressBookUpdates/address-book-q1.xq?rev=1.2
I've made the change that you've requested to these queries.