The goal here was to output some non-breaking space entities in HTML
( ) to denote indentation.
The entity isn't defined by default in XML. Your stylesheet needs
to reference a DTD, or set up an internal subset, which provides that
definition.
Alternatively, as others have said, use the numeric character reference
rather than the mnemonic entity name. That should work everywhere
does, and doesn't have to be explicitly defined.
Either way, if you can get the character into the data in the first place,
HTML output mode will convert it to on output. XML output mode may
or may not do so, depending on whether you specified a DTD reference for
the output and on the exact behavior of your XSLT processor's serializer;
most won't, but I think it's allowed to do so if it wants to make the
additional effort.
And either is better than trying to construct the entity reference as
text. Among other things, if you ever want to pipe the XSLT processor's
output directly into another XML application you'll find that the text
approach will come through as text (equivalent to  ) whereas the
character reference or the properly-defined entity reference will come
through as the intended character.
______________________________________
Joe Kesselman / IBM Research
XSL-List info and archive: http://www.mulberrytech.com/xsl/xsl-list