After two days of working on this, I have found the answer and I hope this 
helps others.  The trick is to use the <xsl:text> tag with the 
disable-ouput-escaping option set to "yes" and to use a [CData] section for 
the new-line character as follows:

<Cell ss:StyleID="sHeaders">
         <Data ss:Type="String">Contract<xsl:text 
disable-output-escaping="yes"><![CDATA[&#10;]]></xsl:text>Value<xsl:text 
disable-output-escaping="yes"><![CDATA[&#10;]]></xsl:text>($M)</Data></Cell>

for more information, visit these sites that I stumbled on:
  http://xml.silmaril.ie/authors/html/ 
  http://xml.silmaril.ie/authors/cdata/

"Leon Ford" wrote:

> I am doing an XSL transformation of a dataset (using a XmlDataDocument) to 
> create an Excel XML file.  Everything is working fine except that my header 
> cells are not getting the line breaks like I want.  
> 
> When I explicitly format the headers in excel the way I want them and save 
> the file as XML, the line built by excel is:
> 
> <Cell ss:StyleID="sHeaders"><Data 
> ss:Type="String">Contract
> Value
> ($M)</Data></Cell>
> 
> In my XSL transformation file, I have the following line:
> 
> <Cell ss:StyleID="sHeaders"><Data 
> ss:Type="String">Contract
> Value
> ($M)</Data></Cell>
> 
> When I do the transformation and save the XML file, the line produced is 
> (note the line wrap):
> 
> <Cell ss:StyleID="sHeaders"><Data ss:Type="String">Contract
> Value
> ($M)</Data></Cell>
> 
> When this is loaded into excel, the linebreaks are gone and the cell text is 
> all on the same line.
> 
> I have tried putting in the <xsl:preserve-space elements="*"/> into my XSL 
> transformation file, as well as XmlDataDocument.PreserveWhitespace = True 
> prior to doing the transformation in my code.  This does not help.
> 
> The bottom line, is that I need the final XML file to be exactly as show 
> below to have excel load this correctly.
> 
> <Cell ss:StyleID="sHeaders"><Data 
> ss:Type="String">Contract
> Value
> ($M)</Data></Cell>
> 
> 
> I am using Office 2003, Windows XP, and Visual Studio 2003.
>