Use position function, for a more advanced and customisable way look at the xsl:number element:
Code:
<xsl:for-each select="Group/xml/rs:data/z:row[@SettingType != 'CB']">
<tr>
<td>Item X:</td>
<td><input type="text" name="listitem{position()}" size="30" value="{@SettingName}" /></td>
<td>remove</td>
</tr>
</xsl:for-each>
Joe (MVP - xml)