The "Top Level" refers to the children of the document element.

Any element can occur at the top level but it must have a namespace

<xsl:transform version='1.0' xmlns:xsl="http://www.w3.org/1999/XSL/Transform" 
   xmlns:my="http://cde.berkeley.edu/my/other/stuff"
>
  <!-- your rules here -->
   <my:other-stuff type="random-crap"/>
</xsl:transform>

But this is illegal:

<xsl:stylesheet version='1.0' xmlns:xsl="http://www.w3.org/1999/XSL/Transform">
  <!-- your rules here -->
  <mr-no-namespace-name/>
</xsl:stylesheet>

Typically, you'll use elements from the XSLT namespace.