[xsl] grouping based on string but with child nodes

Hiya,

I have some old EAD XML that I'm trying to convert to a slightly
better form and what I want to take is something like this:

<unittitle>
    <title>Calendarial rules. Prognostics. || Alcuin,
        <emph render="italic">Quaestiones in Genesim</emph>. ||
        Glossaries. || <emph render="italic">Ps</emph>.-Cicero,
        <emph render="italic">Synonyma ad Lucium Veturium</emph>, with
added Latin-Old English
        glossaries extracted from the Grammar and Glossary of Ælfric.
    </title>
    <!-- other elements -->
</unittitle>

where several titles are grouped together into a single title element
and delineated by two vertical bars || and split this into properly
grouped elements without loss of the <emph> elements.  I'll be
combining this with some other similarly split up data (about time
periods of the works) into a new structure.  So desired output (in a
variable since I then need to count them and create those other
structures one for each of these) something like:

<unittitle>
    <title>Calendarial rules. Prognostics.</title>
    <title>Alcuin, <emph render="italic">Quaestiones in Genesim</emph>. </title>
    <title>Glossaries. </title>
    <title>
        <emph render="italic">Ps</emph>.-Cicero,
        <emph render="italic">Synonyma ad Lucium Veturium</emph>,
        with added Latin-Old English glossaries extracted from the Grammar
        and Glossary of Ælfric. </title>
    <!-- other elements -->
</unittitle>

I've been assuming that this is a two-pass problem where I have to
replace the '||' with some empty XML element  and then group-by that
element?  If that is the case what is the best way to replace these
for grouping?  Or is it possible to do this all-in-one?  XSLT2
solution obviously desired to avoid too much recursion. :-)

Any suggestions?

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