Michael Kay has released Saxon 8.6. This is a complete and conformant implementation of the XSLT 2.0, XQuery 1.0, and XPath 2.0 Candidate Recommendations from the W3C! The saxon8.jar looks to be about twice the size of 8.5, so there should be lot's of good stuff in there.
If you're like me and want to use the latest and greatest right away with oXygen, remember to put it in the Oxygen/lib dir... Thank you Michael! A nice gift before XML 2005 and Christmas. :-)