> When I first approached this I tried using something such as
> 
> <xsl:if test="postion() = 1">
>   <container>
> </xsl:if>
> 
> but this complained as it was not valid XML.
> 

Like many newcomers to XSLT, you are thinking in terms of tags rather than
nodes. An XSLT stylesheet writes nodes to a result tree, not tags to a
serial file, and you can't write half a node.

Your problem is a grouping problem of some kind, and you should read
http://www.jenitennison.com/xslt/grouping

Michael Kay