I think the most convenient way is to use "attribute value templates" concept.
Just write:
Code:
<xsl:variable name="Server" select="'http://www.development'"/>
<img src="{$Server}/Images/dog.gif"/>
In HTML output the "img" literal result element will be as follows:
Code:
<img src="http://www.development/Images/dog.gif"/>
Regards,
Armen