I have resolved this by using <xsl:text>, which allows the
XSLT processor to just move the copyright symbol into the
output HTML with the ampersand:

<p>Copyright <sup>
<xsl:text disable-output-escaping="yes">&amp;#169;</xsl:text>
</sup> 2002 Company, Inc.</p>

This type of maneuver is so complicated, how do junior people
master these quirks??

Regards,
Stuart Zakon
Objects by Design
http://www.objectsbydesign.com

I have followed earlier recommendations made on this list to
output the copyright symbol using the ©  encoding.

However, in my output HTML I see the copyright symbol
preceded by a capital A with something on top:  ©

How do I get rid of that unwanted character?

I use Xalan 2.2 and the XSLT output is created inside
a template that just copies the following:

<p>Copyright &#169; 2002 Company, Inc. All rights reserved.</p>