Is it an error if, when processing an include or import element, a
stylesheet processor can't resolve the href uri-reference?
Yes, it's an error.
The 1.0 spec doesn't say that it is. Or did I miss it?
The 1.0 spec doesn't try to list all the things that can go wrong.
I see that Xalan reports it as an error. Saxon 7.8 probably does too,
though what I see is it doesn't catch the FileNotFound exception.
I'm not sure what you mean by this. Apart from anything else, that's not the
exception you get when a URI can't be resolved.
Michael Kay