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Xerces added an additional feature for XML schema validation that is useful to WTP's users. The feature, honour all schema locations, changes the way in which schema import statements are handled by the parser. This feature changes the way validation occurs in the workspace and should not be enabled by default but users should instead be given a preference to enable this feature.
I've added a Validating files -> Honour all schema locations preference to the Window->Preferences->Web and XML->XML Schema Files preference page. Selecting the option enables the preference for validation. Deselecting the preference disables the option for validation. I've released the change to the 1.5 stream on 20060418.
Verified on WTP 1.5 RC6.
Closing bug.