XSLT outputs a result tree, it doesn't output symbols. You need to describe your required output in terms of a tree containing elements, attributes, and text nodes. If you want one of the attributes or text nodes to have a "<" character in it, then you can achieve this using <xsl:text><</xsl:text>; when you serialize this to XML, it will necessarily be escaped as <.
If you want to produce a "<" character as part of the markup, then you've got things wrong: you should be producing element nodes, not tags.
Michael Kay
http://www.saxonica.com/
Author, XSLT Programmer's Reference and XPath 2.0 Programmer's Reference