Convoluted img src paths

docbook-dtd-4.5b1 docbook-xsl-1.69.1 jdk-1.5.0_4, kubuntu-5.04 oXygen-6.1 
saxon-6.5.4

Consider the following:

<sect1 xmlns:xi="&w3XInclude;" xml:base="">
...
...
<mediaobject>
         <imageobject>
              <imagedata fileref="figures/foo.gif"/>
        </imageobject>
 </mediaobject>
...
...
</sect1>

generates the following html:

...
...
<div class="mediaobject">
<img 
src="file:/home/raymond/docbook/foo/file:/home/raymond/docbook/foo/figures/foo.gif">
</div>
...
...

Why is the image path not relative and duplicated?

Thought  xml:base="" as a document root attribute would implement relative 
paths, but this time to no avail.

Help please.

Raymond