When a page contains a <style> tag with quotes in it (" or '), they are encoded, and not interpreted correctly in the final page.
The generated code looks like :
url('
when it should be
url("...")
For the moment this can be prevented by using <xsl:comment> tag in the <style> tag (unless there are non-xsl tags inside the <style> tag).
Like script tag a comment is added around the content and is now written without &#XXX;.
Fixed in trunk in revision 349 and in 1.1 branch in revision 350.