what you said:

> And given the following XSL which is attempting to output only the "small
> items" elements (elements with "small" in the name) in rows of 3 columns
> each:

what you did
And given the following XSL which is attempting to output elements which
are in positions 1 mod 3 and contain small in the name.

    <xsl:for-each select="//items/item[ (position() mod 3= 1) and
contains(@name, 'small') ]">

That filters out every third element, and then selects from those
ones that are small.

You want, I think to filter out the small  ones, then select every third
of those

    <xsl:for-each select="//items/item[contains(@name, 'small') ]
                                             [ position() mod 3= 1 ]      ">


and here you want

        <xsl:for-each select=". | following-sibling::image[contains(@name,'small')[position() &lt; 3

David


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