But my first priority is to get   into my

transformed output.

Why!?

http://mail.gnome.org/archives/xml/2003-June/msg00099.html

http://sources.redhat.com/ml/xsl-list/2001-11/msg00782.html

<xsl:text>&amp;nbsp;</xsl:text> when transformed still places

&amp;nbsp;

into my output when viewed with a browser.

Because you didn't add the attribute disable-output-escaping="yes" to
the xsl:text node.  You did not read the FAQ or you would know that and
also why you don't want to do that.

What am I doing wrong?

You're not doing your reading and you're not listening.

http://www.dpawson.co.uk/xsl/sect2/nbsp.html#d6216e236

If your PHB is demanding an entity reference in the output of your
transformation, get him to post and we'll put him straight too.

Mike


XSL-List info and archive: http://www.mulberrytech.com/xsl/xsl-list

xml input file
<snippet..>

<!DOCTYPE WITAGLIB [
  <!ENTITY nbsp "&#160;">
]>

xsl file
<snippet..with OBJECT template>