Hello,
I have an XML input file that has elements organized hirarchically in a giant tree structure. I desire to organize the html output file such that each node has an identifier that corresponds to it relative position in the tree, both with respect to its peers and it ancestors. Something like an MSWord doc outline:

1 top level
 1.1 2nd level
     1.1.1 3rd level
     1.1.2 3rd level
        1.1.1.1 4th level
     1.1.3. 3rd level
 1.2 2nd level
2 top level

I use recursion in my xslt, with a:
[list]<ol>
<xsl:apply-templates select="foobar">
</xsl:apply-templates>
</ol></ul>

structure. Unfortunately, this always restarts the numbering at the new child level, rather than what I am trying to achieve above.

Any help is greatly appreciated. Thanks!

Take a look at <xsl:number level="multiple">

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

That worked great. Thanks Michael!