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In section 2.4 of Structures, conformance of schema documents is defined as requiring (along with other things): 1 It is valid with respect to the schema specified in Schema for Schema Documents (Structures) (normative) (§A). (That is, in its ·post-schema- validation infoset·, the <schema> element has a [validation attempted] property with value full or partial and a [validity] property with value valid. There are two problems here: (1) the closing parenthesis is missing, and (2) the definition fails to specify that the schema element is to be validated against the top-level element declaration for schema (and not, for example, against the top-level type definition for xs:anyType). In one sense, the fix is obvious. In another, it's less obvious: this case illustrates the difficulties one has using the terminology and concepts defined by XSD to specify useful rules about validity of one's inputs. (See also bug 5164, which touches on the same problem.)
At our call today, the XML Schema WG agreed that this needs to be fixed, and should be classed as needsDrafting. No clone is needed for 1.0, since the error was introduced inadvertently during a revision for 1.1. The editors expect a pending proposal for bug 5195 to address this problem.
Correction: comment #1 was pasted into the wrong buffer; the reference to bug 5195 does not apply to this issue. As formulated, this issue does not apply to 1.0 (so comment #1 is correct to that extent), because 1.0 does not define conformance for schema documents. (It probably should, but it's not clear that that's a change that can legitimately be made in an erratum.)
A wording proposal intended to resolve this issue is at http://www.w3.org/XML/Group/2004/06/xmlschema-1/structures.b5512.html (member-only link).
The proposal mentioned in comment 3 was adopted by the WG on today's call; the issue is resolved by that action.