The below XSLT seems to work, but despite the xsl:output
method="xml" declaration, the files come out as .html (even though
the contents are fine).

I should have said, the files areB output with an HTML extension, even
though the XML structure remains intact.

How are you running the stylesheet?

The result document file name is not specified by the XSLT, so it's
presumably being controlled by whatever you're using to run the
stylesheet.

---------------------------
A. Charles Muller, Professor

Buddhist Culture Research Center
Musashino University
1-1-20 Shinmachi, Nishitokyo-shi
Tokyo 202-8585, Japan
Office Phone: 042-468-3145

(University of Tokyo, Professor Emeritus)
Web Site: Resources for East Asian Language and Thought
http://www.acmuller.net