Thanks to all for your very helpful replies. I'm using XSLT 2.0. I didn't
know about <sequence> - this is the key to solving my problem. It also
needed the as="node()" - what type is returned if I omit this? I.e. what
type does the variable $usethis have after:
   <xsl:template match="item">
      <xsl:variable name="this" select="."/>
      <xsl:variable name="usethis">
         <xsl:sequence select="$this"/>
      </xsl:variable>   

As usual this list is proving a huge help in understanding and getting the
best from XSLT - many thanks to all the helpful contributors.

Rowan