>  xsl:value-of select="{$param1}" / 

No XSLT attribute that takes an xpath expression uses the {} syntax.
That is for attribute value templates.

the syntax is  xsl:value-of select="$param1"  which you said you'd tried
and it worked, so what was the problem?

David

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