Ok, shit happens.
Which VS2010 version is that? How do I reproduce it?

Version 4.0.30128 RC1Rel.

Sorry, no consistent way to reproduce, happens sporadically.
Also, at times it starts thinking that it knows xslt 2.0.
The instructions like this

<xsl:variable name="index" as="xs:integer" select="1"/>

it marks with an error, which reads like "Attribute 'as' is not yet implemented".

For me, it always happens with this particular file: misc/cobol-names.xslt.

Also I've replaced xslt.xsd supplided with VS with version v2.0
misc/xslt.xslt.

Also, not sure if it's related, I work in the "word wrap" mode (see Edit/Advanced).

Vladimir meant misc/xslt.xsd

Minimal sample:

<?xml version="1.0" encoding="utf-8"?>
<xsl:stylesheet version="2.0"
xmlns:xsl="http://www.w3.org/1999/XSL/Transform"
xmlns:xs="http://www.w3.org/2001/XMLSchema">

<xsl:template match="/">
<xsl:message select="1, 2"/>
</xsl:template>

</xsl:stylesheet>

Right, I can repro it. Let me contact XML editor guys about it.

Hopefully it will be fixed in RTM.