ResolveEntity()

XmlReader.ResolveEntity() is one of the biggest problem for custom XmlReader implementors, since it never provides XmlParserContext. Well, most of those implementations would just use XmlReader as construction arguments. In such cases, they could just invoke the argument XmlReader's. ResolveEntity(). If you have DTD information (name / public ID / system ID/internal subset), then you're still lucky; because you can create XmlDocumentType node and XmlEntityReference that holds ChildNodes. That's how our XmlNodeReader is implemented now.

btw, XmlTextReader in System.Xml 2.0 can resolve entities. It means, now XmlTextReader always checks if there is entity reader inside the class. Actually the similar situation lies in XmlNodeReader and DTD validating reader. They are mostly the same (still different though). As an example, I wrote new XmlNodeReader and XmlTextReader based on the old implementations, but on entity handling, they are so close. So I think, handling entity-resolvable XmlReader might be possible to extract to one (abstract) class - I haven't tried though (since I cannot change the class hierarchy on XmlNodeReader and that of XmlTextReader).

A similar problem and possible solution lies under post validation information providor (such as DTD validator and XSD validator, that handle default values). But I won't provide common solution for it, because people should never use something like PSVI that makes documents inconsistent (well, entity is also, but it is already-happened disaster).