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In 1.0, rule 3 of Identity-Constraint Satisfied says that the element in question must have a simple type. This disallows a complex type with simple content. This appears to be a simple oversight in the drafting, and it has been corrected in 1.1, though we have failed to find a bug report on the issue. Bug #4060 against the test suite points out that this affects the outcome of several tests, and also points to previous correspondence on the issue: http://lists.w3.org/Archives/Public/xmlschema-dev/2003Feb/0025.html
Noted at the same time (see bug #4063) we ought to clarify that an attribute that was "skipped" (in the 1.1 sense) does not have a simple type for the purposes of this rule.