master.xml

<data>
  <entry>
    <p>Project 1</p>
    <content>This is some content</content>
  </entry>
    <entry>
    <p>Project 2</p>
    <content>This is some content</content>
  </entry>
    <entry>
    <p>Project 3</p>
    <content>This is some content</content>
  </entry>
    <entry>
    <p>Project 4</p>
    <content>This is some content</content>
  </entry>
    <entry>
    <p>Project 5</p>
    <content>This is some content</content>
  </entry>
    <entry>
    <p>Project 6</p>
    <content>This is some content</content>
  </entry>
    <entry>
    <p>Project 7</p>
    <content>This is some content</content>
  </entry>
    <entry>
    <p>Project 8</p>
    <content>This is some content</content>
  </entry>
</data>

master.xsl

<xsl:stylesheet xmlns:xsl="http://www.w3.org/1999/XSL/Transform" version="1.0">

  <xsl:output method="xml" indent="yes" />

  <xsl:template match="/">
    <xsl:apply-templates select="data" mode="group"/>
  </xsl:template>

  <xsl:template match="data" mode="group">
    <xsl:for-each select="entry">
      <xsl:variable name="pos" select="position()"/>
        <xsl:apply-templates select="." mode="item"/>
    </xsl:for-each>

  </xsl:template>
  
 <xsl:template match="entry" mode="item">
      <div class="item">
     	<h1><xsl:value-of select="p"/></h1>
     	<xsl:copy-of select="content"/>
      </div>
  </xsl:template>
  
</xsl:stylesheet>