> doesn't that falls in a kind of loop?
> 
> Or does the apply-templates only apply to the childrens of 
> the node being
> processed?

Correct. By default xsl:apply-templates processes the immediate children of
the context node. So this style of coding does a recursive walk of the tree
structure. It's recursive (which is "a kind of loop"), but it terminates,
because the tree has finite depth.

Michael Kay