For a starter, you might look into this stylesheet (should provide
correct  output for your samples) :

<xsl:stylesheet xmlns:xsl="http://www.w3.org/1999/XSL/Transform"
version="1.0">
<xsl:output method="xml" indent="yes"/>

<xsl:template match="node() | @*">
    <xsl:copy>
        <xsl:apply-templates select="node() | @*"/>
    </xsl:copy>
</xsl:template>

<xsl:template match="indent[node()[1][self::indent]]">
    <indent x="{@x + indent/@x}" y="{@y + indent/@y}">
        <xsl:apply-templates select="*/node()"/>
    </indent>
</xsl:template>

<xsl:template match="font[node()[1][self::font]] |
colour[node()[1][self::colour]]">
    <xsl:apply-templates select="*"/>
</xsl:template>

</xsl:stylesheet>


regards,

Thank you very much for your prompt reply.  This stylesheet doesn't
appear to work for my sample when run via .NET (output is identical to
input) - but that's not to say that my code is wrong!  Could you
recommend a Windows XSLT tool that I could download an test this out?