> Can I specify the <xsl:if test="$item eq ???"/> to avoid

You probably want:

<xsl:if test="current-grouping-key() eq $item">

which tests if the value that groups all the <Formats> in the
current-group() is equal to $item...although without the bigger
picture its hard to say.  Your grouping key in (2) is unusual.


-- 
Andrew Welch
http://andrewjwelch.com