Hmmm... just after posting, I realized it's probably safer to use
"normalize-space(.)", to ignore any leading whitespace:
<xsl:param name="split" select="3"/>
<xsl:template match="para">
<para><xsl:call-template name="splitwords"/></para>
</xsl:template>
<xsl:template name="splitwords">
<xsl:param name="i" select="0"/>
<xsl:param name="str1" select="''"/>
<xsl:param name="str2" select="normalize-space(.)"/>
<xsl:choose>
<xsl:when test="$i = $split">
<b><xsl:value-of select="$str1"/></b>
<xsl:value-of select="$str2"/>
</xsl:when>
<xsl:otherwise>
<xsl:choose>
<xsl:when test="contains($str2,' ')">
<xsl:call-template name="splitwords">
<xsl:with-param name="i" select="$i+1"/>
<xsl:with-param name="str1"
select="concat($str1,substring-before($str2,' '),' ')"/>
<xsl:with-param name="str2"
select="substring-after($str2,' ')"/>
</xsl:call-template>
</xsl:when>
<xsl:otherwise>
<xsl:call-template name="splitwords">
<xsl:with-param name="i" select="$split"/>
<xsl:with-param name="str1"
select="concat($str1,$str2)"/>
<xsl:with-param name="str2" select="''"/>
</xsl:call-template>
</xsl:otherwise>
</xsl:choose>
</xsl:otherwise>
</xsl:choose>
</xsl:template>
Anton