C1 Control Characters
There is a less common block of C1 control characters between 128 (#x80) and 159 (#x9F). These include start of string, end of string, cancel character, privacy message, and a few other equally obscure characters. For the most part these are even less useful and less appropriate for XML documents than the C0 control characters. However, they were allowed in XML 1.0 mostly by mistake. XML 1.1 rectifies this error (with one notable exception, which I'll address shortly) by requiring that these control characters be escaped with character references as well. For example, you can no longer include a "break permitted here" character in element content or attribute values. You have to write it as ‚ instead.
This actually does have one salutary effect. There are a lot of documents in the world that are labeled as ISO-8859-1 but actually use the nonstandard Microsoft Cp1252 character set instead. Cp1252 does not include the C1 controls. Instead it uses this space for extra graphic characters such as , Œ, and ™. This causes significant interoperability problems when moving documents between Windows and non-Windows systems, and these problems are not always easy to detect.
By making escaping of the C1 controls mandatory, such mislabeled documents will now be obvious to parsers. Any document that contains an unescaped C1 character labeled as ISO-8859-1 is malformed. Documents that correctly identify themselves as Cp1252 are still allowed.
The downside to this improvement is that there is now a class of XML documents that is well-formed XML 1.0 but not well-formed XML 1.1. XML 1.1 is not a superset of XML 1.0. It is neither forward nor backward compatible.