In 2.0:
<xsl:value-of select="translate($desc, '''', ' ')"/>
In 1.0:
<xsl:value-of select='translate($desc, "'", " ")'/>
or
<xsl:variable name="apos">'</xsl:variable>
<xsl:value-of select="translate($desc, $apos, ' ')"/>
Always remember that XML entity and character references are expanded before the XPath parser kicks in, so they can't be used to escape something that's significant to XPath.
Michael Kay
http://www.saxonica.com/
Author, XSLT Programmer's Reference and XPath 2.0 Programmer's Reference