Hi Cookie Monster (!)

The check on "node" comes from the old "legacy" XML Schema - you can just check for any childnode instead:

<xsl:template match="/">
    <ul class="nav">
        <xsl:for-each select="$currentPage/ancestor-or-self::*[@isDoc and @level = $level]/*[@isDoc and not(umbracoNaviHide = 1)]">
            <li>
                <xsl:if test="*[@isDoc]">
                    <xsl:attribute name="class">dropdown</xsl:attribute>
                </xsl:if>
                <a href="{umbraco.library:NiceUrl(@id)}">
                    <xsl:value-of select="@nodeName"/>
                </a>
            </li>
        </xsl:for-each>
    </ul>
</xsl:template>

But you may want to include the umbracoNaviHide check in there too..?

/Chriztian