Within a table/row <entry> there can also be a <link> element. When I use
<xsl:value-of select='entry[1]'/> etc., I dont' get the nested <link>
element so my link template doesn't get applied. Any clues?

FAQ. VFAQ, actually. The xsl:value-of retrieves the string value
of the selected element. If you want templates to be applied, use
 <xsl:apply-templates select="entry[1]"/>

BTW since your first post to the list in april this was asked and
answered more than hundred times. The XSL FAQ has some entries for
this topic too.