As presented in my article on System.Xml Beta 1 (which was effectively re-written into the Beta 2 version of my System.Xml book) the #1 feature in the .NET 2.0 release for System.Xml was performance. In the past Sun has come out bashing the XML performance support in .NET 1.1 which I wrote about here. Now all has been vindicated officially with an XML performance comparison report between .NET 2.0 Beta2, .NET 1.1, and Sun Java 1.5 Platforms. Simply by looking at the bar charts, in the majority of scenarios .NET 2.0 Beta 2 was twice as fast as the Sun implementation when parsing XML. Superb!
Furthermore here is a comparison article for Web Services performance between .NET 2.0 Beta 2, .NET 1.1, Sun JWSDP 1.5 and IBM WebSphere 6.0. Of course these numbers were helped by the improvements in System.Xml. Now that I work on the WSE team we are also applying the perf love on higher level services such as XML digtial signature and WS-Security. However for those people who ask whether WSE 3.0 will be based on the XmlReader and XmlWriter for the pipeline processing, I am afraid that this is not going to happen. WSE is fundamentally XmlDocument (XML DOM) based and it is too much to move this to a stream based API in the 3.0 release. However the memory working set in WSE 3.0 has been improved substantially and when using MTOM combined with the ASMX pipeline and HTTP, it is possible to stream binary data from a service onto the network stream effeciently.
Now we just need to complete the performance comparison work by having an up-to-date face-off with the latest XSTL processors using the XSLTMark benchmark and the .NET 2.0 XslCompiledTransform class