Hi Mary,
(I'm moving this discussion to the list in preparation for discussing the need for an XLIFF 1.2.x rev to implement fixes - which your ruling renders substantive, and not qualified for errata)
Thank you for letting us know how to proceed. I understand your answer to the question: "How do we deal with the discrepancy between the 1.2 spec and XSD?" as follows. In cases where there is ambiguity between spec and schema, errata may be enough. In cases where there is contradiction between spec and schema, change is substantive and the possibility of preparing an errata is eliminated. Since the latter condition applies to us, we must reconcile the differences, fix any bugs, and create a new release.
I will add this topic to our August 19 agenda (and invite you to attend if you're inclined). My goal will be for the TC to reach consensus and understanding (alternate opinions are welcome). I will advocate for Tony's excellent advice that we absolutely, and aggressively limit the scope of a point release to fixing discrepancies and bugs (no scope-creep - do not let our emerging excellent work on XLIFF 2.0 get tangled into the 1.2.1 upgrade). I will also point to Asgeir's excellent work at cataloging the bugs and discrepancies (http://wiki.oasis-open.org/xliff/XLIFF1.2/Errata) as the place where we begin to define the scope of a point release.
Thanks you,
Bryan