How do I make a linebreak in xsl-fo ?

    <fo:flow flow-name="frame-body" font-family="Times">
        <fo:block>
              <xsl:value-of select="letter/text"/>

You should use
 <xsl:apply-templates select="letter/text"/>
here. Your code selects just the first text node.

    <fo:block/>
    <xsl:apply-templates/>

This doesn't work.....why ?

Note that using a <fo:block/> inline with text may cause unexpected
space, because getting it always right is a wicked problem.