although I am still seeing the issue where the nodeset is being processed after the
template call. What I mean by that is <br><br><b>A</b>B<br><br> will
output <!-- result from template call --><br><b>A</b>B<br> and I would
like the template to continue from after the 2nd <br> pair, not from the
point it was at when the call was made.

<xsl:for-each select="br[local-name(preceding-sibling::node()[1]) = 'br']">
 <something>
   <xsl:call-template name="stat">
     <xsl:with-param name="nodeset" select="following-sibling::node()" />
   </xsl:call-template>
 </something>
</xsl:for-each>

Regards,
Mukul