As you pointed out in your private mail to me, encoding declarations 
in external DTD's are permitted.  You are right that the XML spec is 
not clear enough.
xp does support encoding declarations. 
1) text.xml
<?xml version="1.0"?>
<!DOCTYPE a SYSTEM "test.dtd">
<a/>
2) test.dtd
<?xml encoding="iso-8859-1"?>
<!ELEMENT a EMPTY>
<!ATTLIST a atr CDATA "default">
3) xp
Start document
Start element: a
  Attribute: atr CDATA "default"
End element: a
End document
Makoto
 
Fuji Xerox Information Systems
 
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