More precisely, XMPP IM says :
2.4.  Extended Namespaces
[...]
   Support for any given extended namespace is OPTIONAL on the part of
   any implementation (aside from the extended namespaces defined
   herein).  If an entity does not understand such a namespace, the
   entity's expected behavior depends on whether the entity is (1) the
   recipient or (2) an entity that is routing the stanza to the
   recipient:

   Recipient: If a recipient receives a stanza that contains a child
      element it does not understand, it SHOULD ignore that specific XML
      data, i.e., it SHOULD not process it or present it to a user or
      associated application (if any).  In particular:

      *  If an entity receives a message or presence stanza that
         contains XML data qualified by a namespace it does not
         understand, the portion of the stanza that is in the unknown
         namespace SHOULD be ignored.

      *  If an entity receives a message stanza whose only child element
         is qualified by a namespace it does not understand, it MUST
         ignore the entire stanza.

      *  If an entity receives an IQ stanza of type "get" or "set"
         containing a child element qualified by a namespace it does not
         understand, the entity SHOULD return an IQ stanza of type
         "error" with an error condition of <service-unavailable/>.

I think I am reading the spec right, but now if the jabber:iq:something
namespace is unrecognised, it will return:

<iq type="error" to="someone@jabber.org" id="msg_16">  
  <query xmlns="jabber:iq:last"></query>
  <error type="cancel">  
    <service-unavailable
xmlns="urn:ietf:params:xml:ns:xmpp-stanzas"></service-unavailable>
  </error>
</iq>

Correct me if this is wrong.

For completeness, an <iq type="get"/> or <iq type="set"/> can only have one
child element. If the namespace of that element is unknown, than you must return
the service-unavailable error. I would recommend that you also send along the
legacy error code 503. I don't know why you don't use empty elements, but a
resulting packet would look like:

  <iq type="error" to="client@example.org/resource" id="msg_16">
    <query xmlns="jabber:iq:last"/>
    <error type="cancel" code="503">
      <service-unavailable xmlns="urn:ietf:params:xml:ns:xmpp-stanzas"/>
    </error>
  </iq>

Note that it is forbidden to return anything when receiving result or error type
iq's, even if the namespace is unknown.

OK, I will add the 503 code in for legacy support.

As for the empty elements, this is down to Loudmouth.

Currently this is ONLY sent in response to a GET or SET IQ as per the spec ;)