Encoding attribute

Hi,
I hope anybody can help me with this silly question.
I don't understand very well what kind of encoding I must utilice. I live in
Spain and I read that I must utilice ISO-8859-1 characters and I put always
in XML files the <?xml version="1.0" encoding="ISO-8859-1"?>  and in the XSL
files when I want to escape HTML I put always <?xml version="1.0"
encoding="ISO-8859-1"?>
<xsl:stylesheet version="1.0"
xmlns:xsl="http://www.w3.org/1999/XSL/Transform">
<xsl:output method="html"/>
The problem is when I want to put some "especial" characters like "?" ,
non-breaking espaces, etc... I put in the XSL StyleSheet when I want to
display "euro" character &euro; &#8364; but whith &euro; he tells me "Entity
Reference not defined" and with &#8364; I see another character.
Any suggestion, please?





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