> Am I right in saying that declaring the <xsl:param /> tag as follows will
> make the named node set default to null

assuming you mean empty node set (Xpath doesn't define null)
then no.

<xsl:param name="node-set" select=".." />

it wil default to the parent of the current node  at the point the
template is called.

<xsl:param name="node-set" select="" />

that's an error I think an empty string isn't a valid XPath.

what you want is an Xpath that selects an empty node set.
I always use

<xsl:param name="node-set" select="/.." />

Although I've seen Mike Kay use
<xsl:param name="node-set" select="@comment()" />
on this list

David

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