> In my XSLT I match PW
> <xsl:element name="p">
>         <span class="current_ref_in_footnote">
>                 <xsl:apply-templates select="text()[1]"/>
>         </span>
>         <xsl:apply-templates/>
> </xsl:element>
> 

You're processing text()[1] twice. Simplest (in 2.0) is:

<xsl:element name="p">
        <span class="current_ref_in_footnote">
                <xsl:apply-templates select="text()[1]"/>
        </span>
        <xsl:apply-templates select="node() except text()[1]/>
</xsl:element>

Alternatively:

<xsl:element name="p">
  <xsl:apply-templates/>
</xsl:element>

<xsl:template match="PW/text()[1]">
  <span class="current_ref_in_footnote">
      <xsl:value-of select="."/>
  </span>
</xsl:template>
  

Michael Kay
http://www.saxonica.com/