hello.
a while ago i was searching for an implementation of xinclude in xslt 
2.0, and there was no such thing. since i needed it, i did implement it 
and would like to make it available now. it has the following restrictions:
- only xpointer barenames and the element() scheme are supported (both 
are required by the xinclude spec). the other xpointer schemes are not 
standardized anyway...
- xml:base fixup will always insert absolute uris. i found this to be 
more practical than using relative uris. both things are allowed by the 
spec, if required this could be made configurable.
- the content negotiation part (accept/accept-language) cannot be 
implemented in xslt, therefore these attributes are ignored.
- since parse="text" is implemented using unparsed-text(), the exact 
behavior of how to determine the character encoding cannot be 
controlled. however, xslt's behavior has been defined to be consistent 
with xinclude, so everything should be fine. but if there is a problem 
with reading the text document, there will be an xslt error instead of 
an xinclude error.
i have not yet done extensive testing, but some of the simpler examples 
of the test suites seemed to work just fine.
the xslt 2.0 stylesheet is available at http://dret.net/projects/xipr/ 
and can be freely used, it is licensed under the cc lgpl (which means, 
if you change it, you have to make your changes openly available under 
the lgpl as well).
any feedback is greatly appreciated! kind regards.
erik wilde   tel:+1-510-6432253 - fax:+1-510-6425814
       dret@xxxxxxxxxxxx  -  http://dret.net/netdret
       UC Berkeley - School of Information (iSchool)