> You would probably say that xsl:include would do the trick, yes but that's

No xsl:include is for including stylesheets.
You just want something like

<xsl:template match="include">
 <xsl:apply-templates select="document(@url,.)"/>
</xsl:template>

and a template for your  <if include="1"> construction that selects
the then or else clause depending on the value of @include.

David




 XSL-List info and archive:  http://www.mulberrytech.com/xsl/xsl-list