The XSLT parser in 1.5 does not honor xsl:strip-space in the stylesheet. This is a regression from 1.4. Here's the example code and supporting files

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XSLTTest.java
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import javax.xml.transform.*;

public class XSLTTest {
        public static void main(String[] args) {
                try {
                        test(args[0], args[1]);
                } catch (Exception e) {
                        e.printStackTrace();
                }
        }

        private static void test(final String xsl, final String xml) throws Exception {
                TransformerFactory tFactory = TransformerFactory.newInstance();
            Transformer transformer = tFactory.newTransformer(new javax.xml.transform.stream.StreamSource(xsl));
            transformer.transform (new javax.xml.transform.stream.StreamSource(xml), new javax.xml.transform.stream.StreamResult( System.out ));
        }
}
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document.xml
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<?xml version="1.0"?>
<document>

</document>
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stylesheet.xsl
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<stylesheet version='1.0' xmlns='http://www.w3.org/1999/XSL/Transform&#39;>
  <strip-space elements='*'/>

  <template match='text()'>
should not be used
  </template>
</stylesheet>
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Running the test in 1.4.2 on Linux, the result is

$ /usr/java/j2sdk1.4.2_10/bin/java XSLTTest stylesheet.xsl document.xml
<?xml version="1.0" encoding="UTF-8"?>

With 1.5, I get
 
$ /usr/java/jdk1.5.0_06/bin/java XSLTTest stylesheet.xsl document.xml
<?xml version="1.0" encoding="UTF-8"?>
should not be used
  
The behaviour is different in 1.5 and is a regression from 1.4

Release Regression From : 1.4.2
The above release value was the last known release where this
bug was known to work. Since then there has been a regression.

Release Regression From : 1.4.2
The above release value was the last known release where this
bug was known to work. Since then there has been a regression.