I've actually struggled with the use case put forth as the need for dynamic 
variable scoping.  One approach I used to deal with having to add a new 
parameter, that I wanted passed through to one of my call-backs, was to add 
an entity reference to all the templates in my stylesheet library.  
Unfortunately, this does mean that you can't treat the stylesheet library as 
a black box.  However, it made it easy to extend.
I'm just mentioning that as a suggestion to those who may also have to face 
this problem with an XSLT 1.0 processor (which means you can't use the 
node-set trick).
Despite having faced this very problem, myself, I didn't like the idea of 
dynamic-scoping, at first.  After I started to see that most of the 
associated risks could be mitigated or eliminated, I started to warm up to 
the idea.  However, I've spotted one more vulnerability in Dr. Schadow's 
proposal: namespace collisions among dynamically-scoped variables.  What it 
really comes down to is that two scopes (lexical vs. dynamic) aren't enough. 
 That's not an impossible problem to fix, however.  In fact, I think the 
solution is quite straight-forward.  Rather than <parameter 
scope="dynamic>/> how about using the value of the scope attribute (if 
present) to be treated as the name of a scope?  This allows you to really 
treat a stylesheet library as a black box (even if it uses several 
stylesheet libraries, itself), without risking mucking with its inner 
workings via dynamic-variable namespace collisions.
In fact, I was even thinking that a template which accepts a dynamic 
variable as dynamic should terminate its scope (i.e. it doesn't get passed 
down to the next tier of the call-tree, if not done explicitly), by default. 
 However, if the scopes are named, I don't see any advantage to doing this, 
unless the same template library is used at multiple places in a single 
call-stack (wait... maybe that's reason enough to do it).
Thanks for considering my suggestion.  BTW, XSLT/XPath 2.0 is looking very 
promising.  Cheers to everyone involved!
Matthew Gruenke
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