XInclude: Design by committee strikes again!
After a million years, the XInclude spec has been released. Unfortunately it is seriously flawed, as described, here, by Dare Obasanjo, the former System.Xml PM. The good news is that the API workaround he mentioned will be implemented in .Net 2.0, but it still does not bode well for XSD schema designers. Dare has more on the W3C's reasons for doing what they did and why they are wrong headed here.
If you've ever worked on a large XML file that a lot of people work on, you'll know why you want XInclude. Pity it isn't transparent.