<xsl:template match="server"> <xsl:element name="drillOutDir"> <xsl:value-of select="abc:configuration/drillOutDir">
</xsl:value-of> </xsl:element>
<xsl:element name="started">
<xsl:value-of select="abc:configuration/started">
</xsl:value-of>
<xsl:copy-of select="@*[status = 'true' ]"/>
</xsl:element>
<xsl:text></xsl:text>
</xsl:template>

1) attribute nodes have to be added before any other nodes.
2) the context node changes is dependant on the template.
3) "<xsl:text></xsl:text>" is completely superfluous.

<xsl:template match="server">
	<xsl:element name="drillOutDir">
		<xsl:value-of select="abc:configuration/drillOutDir"/
	</xsl:element>
	<xsl:element name="started">
		<xsl:copy-of select="@status[. = 'true' ]"/>
		<xsl:value-of select="../abc:configuration/started"/>
	</xsl:element>
</xsl:template>

regards,
--
Joris Gillis (http://www.ticalc.org/cgi-bin/acct-view.cgi?userid=38041)
"Quot capita, tot sententiae"  - Terentius , Phormio 454