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In Part 1, section 3.17.5.2, definition of "eligible item set", clause 2 requires that the item's [schema actual value] is not absent, while clause 3 requires that the item is not nilled. I believe that for an item that is nilled, the [schema actual value] will always be absent, and therefore clause 3 is redundant. (Actually clause 2 appears to specify two conditions which are independent of each other and could be separated into 2 clauses.)
Note, this text seems to have been added in resolution of bug #2040
For the record: the proposal adopted for bug 2040 is given at http://www.w3.org/XML/Group/2004/06/xmlschema-1/structures.cleanup-3.200610.html#sic-id and suggests an explanation for the redundancy: when it was adopted, clause 2 required only that the item have been validated successfully, not that it have a [schema actual value]. So when it was adopted, I don't think clause 3 was redundant. The wording involving [schema actual value] was introduced as a fix for bug 2041 by the "Omnibus/consent agenda proposal" of May 2007: http://www.w3.org/XML/Group/2004/06/xmlschema-1/structures.consent.200705.html#sic-id Bug 2041 focuses on defaulted values, and introduces the reference to [schema actual value] as a way of including them explicitly. It's easy to conjecture that because (a) we were focusing on fixing 2041, and (b) we were regarding this is a light-weight non-controversial change and trying to keep things light-weight, both the editors and the WG failed to notice that the change rendered clause 3 redundant. In everyone's defense, the form then taken by clause 3 was if it is an element information item, then clause 3.2 of Element Locally Valid (Element) (§3.3.4) does not apply. and not, as now: if it is an element information item, then it is not ·nilled·. which may be a little easier to connect to the presence or absence of [schema actual value]. Since clause 3 was not present in 1.0, there is no particular need to retain it for purposes of error-code backward compatibility. I don't know how people who care about clause numbers as sources of error codes will react to the proposal to split clause 2. Personally, I think it would probably be clearer to split it into new clauses 2 and 3 (in either order).
RESOLVED: WG agrees to remove clause three, and add a note as described above. RESOLVED: dispensation of clause 2 is "editorial" and therefore up to the editors.
At the 2010-10-29 telecon, the WG adopted a fix for this bug shown in the following proposal: http://www.w3.org/XML/Group/2004/06/xmlschema-1/structures.omni.20101029.html (member-only link) The fix removed the redundant clause 3, and split clause 2 into 2 clauses. Accordingly, I'm marking this issue as resolved. Michael Kay, as the originator of the bug report, you are invited to indicate either that you are happy with the resolution of the issue (by changing the bug's status to CLOSED) or else that you are not happy (by reopening it and explaining what's wrong). If we don't hear from you in two weeks, the WG will assume you are happy.