> the xsl:if test doesn't work  .... position==last for all nodes.

because you are working with a node list of length 1.

<xsl:for-each select=".">

. only selects one node, so position()=last()=1, always inside that 
for-each.


> When I inline the above code instead of using call-template the
> xsl:if test works as expected.

you presumably took the test out of the for-each as well as
the template.

David


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