Differential Galois groups, specializations and Matzat's conjecture

We study families of linear differential equations parametrized by an algebraic variety $\mathcal{X}$ and show that the set of all points $x\in \mathcal{X}$, such that the differential Galois group at the generic fibre specializes to the differential Galois group at the fibre over $x$, is Zariski dense in $\mathcal{X}$. As an application, we prove Matzat's conjecture in full generality: The absolute differential Galois group of a one-variable function field over an algebraically closed field of characteristic zero is a free proalgebraic group.
Comment: 88 pages, this is a major revision and reorganization of the first version, to appear in Memoirs of the AMS