<xsl:for-each select="//INSTANCE[(_at_)class='Audio' or @class='Web-Site']">
This loops over the nodes that you want but then having got there you do this:
<xsl:for-each select="key('tracker','Position')">
which selects all the nodes using the constant key 'Position' so it
does not depend in any way on the INSTANCE node and so the inner loop
will produce identical <item> elements one for each of the originally
selected INSTANCE[(_at_)class='Audio' or @class='Web-Site' elements.
insde this for-each the current node is whatever node is returned by
your key, so your INSTANCE elements are not used at all.
David
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