> I thought my original explanation was a little confusing (ok very
> confusing).
> I got things working as I wanted after changing the xml file tags and
> adding attributes.
> Here is what I ended up with, what other approach would you have taken?
>
> Also is it more efficient to declare billto as a string and pass as a
> parameter and declare
> the document in the apply-templates select, like below. Or to declare
> billto as a document
> initially and pass the node set as the parameter.
>
> Thanks,
> Rich
Hello Rich,
your stylesheet looks really good. Only some little changes according 
the variable usage: A variable is more or less useless, if you can't use 
it multiple times.
========================= mergeXML.xsl ===============================
<?xml version="1.0"?>
<xsl:stylesheet version="2.0"
Really version="2.0"? Only Saxon supports the Working Draft version of 
XSLT and XPath 2.0.
     xmlns:xsl="http://www.w3.org/1999/XSL/Transform">
<xsl:output method="html"/>
<xsl:template match="/invoice-xml-files">
    <xsl:variable name="TA-Parties" 
select="document(@bill-to)/TRANSACTION_PARTIES/TRANSACTION_PARTY"/>
I suggest to declare the node set once. Look at the further changes.
    <html>
        <head>
            <title>
                This is driving me out of my mind!!!!
            </title>
        </head>
        <body>
            <xsl:apply-templates 
select="document(@invoice-header)/INVOICES/INVOICE">
              <xsl:with-param name="TA-Parties" select="$TA-Parties"/>
            </xsl:apply-templates>
         </body>
    </html>
</xsl:template>
<xsl:template match="INVOICES/INVOICE">
    <xsl:param name="TA-Parties"/>
    <hr/>
    <h3>INVOICE HEADER RECORD</h3>
    <xsl:apply-templates
         select="$TA-Parties[(_at_)account=current()/@account and 
type='BILL_TO']"/>
    <xsl:apply-templates/>
</xsl:template>
<!-- Invoice header templates go here -->
<xsl:template match="TRANSACTION_PARTY">
    <xsl:text>Bill To:</xsl:text><br/>
    <xsl:value-of select="NAME"/><br/>
    <xsl:value-of select="ADDRESS1"/><br/>
    <xsl:value-of select="ADDRESS2"/><br/>
    <xsl:value-of select="CITY"/>
    <xsl:text>, </xsl:text>
    <xsl:value-of select="STATE"/>
    <xsl:text>  </xsl:text>
    <xsl:value-of select="ZIPCODE"/><br/>
</xsl:template>
</xsl:stylesheet>
========================== mergeXML.xsl ==========
I hope I did no mistakes.
The next time please send the XML with the question, this solves mostly 
the confusion.
Regards,
Joerg
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