<xsl:text disable-output-escaping="yes">&amp;</xsl:text> produces "&amp;" 
  so it's no surprise (and very consistent) that
  <xsl:text disable-output-escaping="yes">&amp;#64;</xsl:text>
  actually produces "&amp;#64;"


That means that disable-output-escaping is not being used at all. Are
you sure you are linerising from the XSLT system. If you use msxsl to
generate a DOM tree and linearise from the DOM then the linearisation
hints such as disable-output-escaping, and any attributes to xsl:output
have no effect. If d-o-e was being used above you would get
 & and &#64; in the above two cases.



  I will try with other xsl processors but I don't really expect any 
  difference in behavior.

You will see a difference in any system that supports d-o-e (which
includes msxsl in some configurations) and most other systems
saxon, xalan, etc.

David

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