I'm trying to develop a transformation that will
  output, among other things, this text (literal)...
  
  <cfreturn this>

XSLT is mainly designed to produce XML and that is not XML.
You coul duse 
<xsl:output method="text"/>
to outpiut in text mode then you could use
  &lt;cfreturn this&gt;
in the stylesheet which will produce the required string.

David


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