I think compatility problems exist between xalan 1 and the jdk 1.3.
As i wrote in a topic called Xalan i had some problem with xalan 1, my xml and xsl file where right and when i want to perform an XSLT with xalan 1, it couldn't parse the xml.
I've tried to do the same using Xalan 2, and... it works!
I've seen nothing about that kind of problem on the apache site, so i can only imagine that incompatibility.