I think below examples are self explanatory.
xsl:apply-templates: defines a set of nodes to be processed, and causes the
system to process them by selecting an appropriate template
Example: <para>xxxxx<b>bold text</b>xxxx</para>
<xsl:template match="para">
<p><xsl:apply templates/></p>
</xsl:templates>
Result: <p>xxxxx<b>bold text</b>xxxx</p>
xsl:value-of: writes the string value of an expression to the result tree.
<xsl:template match="para">
<p><xsl:value-of select="."></p>
</xsl:templates>
Result: <p>xxxxxbold textxxxx</p>
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