I'd appreciate some advice on the following issues...

Being from the UK, we have a requirement to convey the UK pound-sterling
character in XML documents (and validate those documents of course).
The Unicode decimal value of pound sterling is 163 (0xA3), but of course
the UTF-8 encoding is 0xC2A3.

I'm ok with the fact that a UTF-8 encoded instance doc can contain the
above two byte values directly (i.e. 0xC2 and 0xA3), but I'm getting
conflicting opinion as to whether replacing those two bytes with the
character entity £ is equivalent or not - I think not, so long as
the document is UTF-8 encoded, though it would be correct to do this
if the encoding were "ISO-8859-1", as would inserting the actual pound
character (ie the 8 bit value equivalent to 0xA3). However, I'm happy to
be corrected.

I guess the fundamental question is: how are character entities
interpreted in relation to the document encoding (i.e. what's the
order of evaluation)? If that's not the fundamental question then
I'm missing something :-))

A supplementary question: if I want to validate text containing pound
sterling characters, and my Schemas are UTF-8 encoded, what do I put in
the pattern facet: £ or the two character UTF-8 encoding? And what
will your average regular expression evaluator make of the latter?

Thanks in advance for any help
-- 

Andy Greener                         Mob: +44 7836 331933
GID Ltd, Reading, UK                 Tel: +44 118 956 1248
andy@g...                       Fax: +44 118 958 9005