flatxml-to-nestedxml.xslt

<?xml version="1.0"?>
  		
<xsl:stylesheet version="2.0"
	xmlns:xsl="http://www.w3.org/1999/XSL/Transform"
	xmlns:xs="http://www.w3.org/2001/XMLSchema">

<xsl:output indent="yes" encoding="UTF-8"/>

<xsl:template match="/">
	<ead>
		<eadheader>...</eadheader>
		<xsl:choose>
			<xsl:when test="//line[1]/@collection">
				<archdesc level="{//line[1]/@collection}" id="{//line[1]/@id}">
					<xsl:apply-templates select="//line[@parent = '']"/>
				</archdesc>			
			</xsl:when>
			<xsl:otherwise>
				<xsl:text>Cannot locate : </xsl:text><xsl:value-of select="//line[1]/@collection"/>
			</xsl:otherwise>
		</xsl:choose>
	</ead>
</xsl:template>

<xsl:template match="line">
	<xsl:variable name="id" select="@id"/>
	<xsl:variable name="collection" select="@collection"/>
	<c level="{$collection}" id="{$id}">
		<xsl:if test="../line[@parent = current()/@id]">
				<xsl:apply-templates select="../line[@parent = current()/@id]"/>
		</xsl:if>
	</c>
</xsl:template>

</xsl:stylesheet>