I wanted to create a DOS .bat file to test several documents based on information in a xml file.
Only everything line is created on one single line in the .bat file. I saw this problem on several forums but could not find the right answer. The thing is you have to have a carriage return and line feed for the line separation.
I wanted to drop a question about it here but I just found out how I could get it to work.

When I used <xsl:text> or codepoints-to-string() to convert carriage return and line feed and used the method 'html' output I got the output text on one line in my .bat file.
When I used output 'xml' I get for every return the text '#xD;'

But when I use the output method 'text' you get the right linefeed and carriage return pair for your MSDos .bat file.

syntax example: use <xsl:text>#13;#10;</xsl:text> or
<xsl:value-of select="codepoints-to-string((13,10))"/>

<xsl:output method="text"/>
<xsl:template match="/">
    <xsl:for-each select="myelement">
        <xsl:variable name="type" select="@testtype"/>
        <xsl:variable name="doc" select="@href"/>
        <xsl:text>#13;#10;</xsl:text>set test=<xsl:value-of select="$type"/>
        <xsl:text>#13;#10;</xsl:text>set doc=<xsl:value-of select="$doc"/>
        <xsl:text>#13;#10;</xsl:text>call test.bat<xsl:text>#13;#10;</xsl:text>
    </xsl:for-each>
</xsl:template>

You should use xsl:output method="text" to generate a .bat file.

The spec doesn't say whether the processor should output line endings as NL characters or as CRLF. It might depend on the target platform, or it might depend on what you asked for in the stylesheet.

Michael Kay
http://www.saxonica.com/
Author, XSLT Programmer's Reference and XPath 2.0 Programmer's Reference