There are two mistakes

1.
	<xsl:value-of select="canine">
	gets the value of the canine attribute which doesn't exist so it returns nothing.
	You only have a dog attribute and you are not interested in its value you want to set it so you should use

	<xsl:attribute name="type">canine</xsl:attribute>

2.
	you don't copy the <pet> before you try to add an attribute to it.  In your example it is actually copied by
	
	<xsl:copy-of select = "."/> 

	which occurs after you have tried to set the type attribute.  The following uses xsl:copy to copy pet.

	<pet>
		<xsl:apply-templates select="@type"/>
		<xsl:copy-of select = "child::*"/> 		-- you use child::* because you have allready
							   copied the current tag i.e. pet
	</pet>


The following should work.

<?xml version = "1.0" encoding = "UTF-8"?>
<xsl:transform xmlns:xsl = "http://www.w3.org/1999/XSL/Transform"
version = "1.0">

<xsl:template match = "petXML">
	<animalXML>
		<xsl:apply-templates select = "*"/>
	</animalXML>
</xsl:template>

<xsl:template match = "pet">
	<pet>
		<xsl:apply-templates select="@type"/>
		<xsl:copy-of select = "child::*"/>
	</pet>
</xsl:template>

<xsl:template match="@type[.='dog']">
	<xsl:attribute name="type">canine</xsl:attribute>
</xsl:template>

</xsl:transform>


Edward

 XSL-List info and archive:  http://www.mulberrytech.com/xsl/xsl-list