> replace special characters by element tags
                                        ^^^^

remember XSLT never accesses or generates tags (well its serialisation
may generate tags, but conceptually only after the transform has
completed)


<xsl:analayse-string select="." regex="+(.*?);">
  <xsl:matching-substring>
 <i><xsl:value-of select="regex-group(1)"/></i>
 </xsl:matching-substring>
<xsl:non-matching-substring>
 <xsl:value-of select="."/>
 </xsl:non-matching-substring>
</xsl:analyze-string>

David