>		<xsl:for-each select="ms:node-set($sorted)">
>			<xsl:value-of select="."/>
>		</xsl:for-each>

That is the same as doing
	<xsl:value-of select="$sorted"/>
and will give the string value of the variable sorted.

A result tree fragment corresponds to a document so xx:node-set()
_always_ returms a nnode set of exactly one node ( / )
so 
 <xsl:for-each select="ms:node-set($sorted)">
is just iterating over the sing root node /

perhaps you want

 <xsl:for-each select="ms:node-set($sorted)/*">


Also, you have

<xsl:template match="/" mode="main">

but you never apply templates in a mode "main" so this will never be
executed.

Conversely you have 

<xsl:apply-templates mode="copy" select="data/item"/>

but you have no templates in a mode called copy.

David

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