Generate implicit wrapper element -- details

I worked through this example and it worked as desired. However, I am having
trouble understanding what is happening in these matches:

<xsl:template match="li[not(preceding-sibling::*[1][self::li])]"/>

<xsl:apply-templates select="following-sibling::*[1][self::li]"
                       mode="in-list"/>

Thanks for any explanation that you can give.

Rick Quatro
Carmen Publishing
585 659-8267
www.frameexpert.com