You mean, you want the entity references to be used in the output?
This will happen automatically with the HTML output method (in Saxon), because HTML has predefined entities for these characters. This isn't true of XML output. You can force it using character maps, but it's hard work. To be honest, XSLT is best for manipulating XML at the logical level, and if you need to manipulate the physical level you may be better off with a tool such as awk or sed.
Michael Kay
http://www.saxonica.com/
Author, XSLT Programmer's Reference and XPath 2.0 Programmer's Reference