The use of the terms "parsed" and "unparsed" for entities may seem a bit on the obscure side. SGML uses the terms "text" and "data" for the same purposes, but we found that misleading, because it's all, once you get right down to it, data, and furthermore, some of the "data" entities might contain text. The only real difference between the two kinds of entities is whether an XML processor has to try and parse them or not; hence the names.
Another benefit of using "parsed" and "unparsed" is that this frees up the useful word text, which really ought to mean something in the XML context.
Copyright © 1998, Tim Bray. All rights reserved.