XSLT 1.0 search and replace template.

search-and-replace.xsl

<!--
    SEARCH & REPLACE
    string:    The text to be evaluated
    search:    The character or string to look for in the above string
    replace:   What to replace it with

    The output will neatly concatenate the string with replacements made.
--> 

<xsl:template name="search-and-replace">
    <xsl:param name="string" />
    <xsl:param name="search" />
    <xsl:param name="replace" />

    <xsl:value-of select="concat(substring-before($string, $search), $replace, substring-after($string, $search))" />   
</xsl:template>