When I run your stylesheet in Saxon I get this output:
<?xml version="1.0" encoding="UTF-8"?>
<table border="0" cellspacing="0" cellpadding="0">
<tr>
<td valign="top">
<img src="http://172.16.2.33/images/global/bullet.gif"
style="padding: 8px 8px 0px 4px;"/>
</td>
<td>
<a href="">3200 Conference Room</a>
</td>
</tr>
<tr>
<td valign="top">
<img src="http://172.16.2.33/images/global/bullet.gif"
style="padding: 8px 8px 0px 4px;"/>
</td>
<td>
<a href="">Atrium</a>
</td>
</tr>
</table>
How are you running it?
Michael Kay
http://www.saxonica.com/
Author, XSLT Programmer's Reference and XPath 2.0 Programmer's Reference