> <xsl:output method="xhtml"> which solves
> the whole problem of keeping html looking like xml but wonder how widely
> this is supported???

It is in the current  draft of XSLT2 
The only implementation of XSLT2 that I know of is saxon 7.x.

However XSLT 1 allows implementations to specify extra output methods
which must be in some namespace so
<xsl:output method="xxx:xhtml"> 
for some namespace bound to xxx:
several XSLT 1 systems implement this (saxon 6.x, xt and xalan have been
mentioned in this thread already I think)

David

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