Weird characters in generated HTML

Sorry for the stream of newby questions...

I got both Saxon and Xalan to work with XIncludes and catalogs from Ant.
However, all of my generated HTML, using either processor, comes out as
a link....
Using Xalan I also got a bunch of hatted A's (an A wearing a ^) where
ever there is a hard space.
Using Saxon my target database file for olinks has a space at the top.
Using xsltproc under Windows, with the same source and customization
layer, this never happened.
Any ideas?