I right click on the schema and choose Create XML Document. I have the options set so the initial result is a valid document to use as a template. The generator uses p1 as the namespace prefix, i.e.
Subject:namespace problem on XML generated from schema Author:Ron Hylton Date:28 Nov 2011 09:37 PM
Ivan,
I'll upload a simpler schema that has the same problem, and also a screeshot that shows insertion of an element with an invalid prefix from the tree view.