encoding issues

Can one of the encoding guru's please explain to me the following...

Why does msxml4 (when using ie's autoselect) default to unicode without
the line:

<xsl:output method="xml" encoding="utf-8"/>

Whereas with it, it defaults to Western European (windows) (iso-8859-1 I
think) - isnt that the wrong way around?

Why does saxon always default to Western European regardless of what I
specifiy?

The reason I ask is that Im using &#160; at various places, which is
part of unicode but not Western European...



cheers
andrew


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