Удаляет пробелы, знаки табуляции и перевода каретки
<xsl:variable name="whitespace" select="'	

 '" />
<!-- Strips trailing whitespace characters from 'string' -->
<xsl:template name="string-rtrim">
    <xsl:param name="string" />
    <xsl:param name="trim" select="$whitespace" />
    <xsl:variable name="length" select="string-length($string)" />
    <xsl:if test="$length > 0">
        <xsl:choose>
            <xsl:when test="contains($trim, substring($string, $length, 1))">
                <xsl:call-template name="string-rtrim">
                    <xsl:with-param name="string" select="substring($string, 1, $length - 1)" />
                    <xsl:with-param name="trim"   select="$trim" />
                </xsl:call-template>
            </xsl:when>
            <xsl:otherwise>
                <xsl:value-of select="$string" />
            </xsl:otherwise>
        </xsl:choose>
    </xsl:if>
</xsl:template>
<!-- Strips leading whitespace characters from 'string' -->
<xsl:template name="string-ltrim">
    <xsl:param name="string" />
    <xsl:param name="trim" select="$whitespace" />
    <xsl:if test="string-length($string) > 0">
        <xsl:choose>
            <xsl:when test="contains($trim, substring($string, 1, 1))">
                <xsl:call-template name="string-ltrim">
                    <xsl:with-param name="string" select="substring($string, 2)" />
                    <xsl:with-param name="trim"   select="$trim" />
                </xsl:call-template>
            </xsl:when>
            <xsl:otherwise>
                <xsl:value-of select="$string" />
            </xsl:otherwise>
        </xsl:choose>
    </xsl:if>
</xsl:template>
<!-- Strips leading and trailing whitespace characters from 'string' -->
<xsl:template name="string-trim">
    <xsl:param name="string" />
    <xsl:param name="trim" select="$whitespace" />
    <xsl:call-template name="string-rtrim">
        <xsl:with-param name="string">
            <xsl:call-template name="string-ltrim">
                <xsl:with-param name="string" select="$string" />
                <xsl:with-param name="trim"   select="$trim" />
            </xsl:call-template>
        </xsl:with-param>
        <xsl:with-param name="trim"   select="$trim" />
    </xsl:call-template>
</xsl:template>Вызов:
<xsl:call-template name="string-trim">
        <xsl:with-param name="string" select="." />
</xsl:call-template>Примечание: если требуется удалить только пробелы, разумнее использовать встроенную функцию normalize-space($string)
<xsl:template name="removeMultipleSpaces">
	<xsl:param name="string" />
        <xsl:value-of select="normalize-space($string)"/>  
</xsl:template>
<xsl:call-template name="removeMultipleSpaces">
	<xsl:with-param name="string" select="." />
</xsl:call-template>