What r u using to transform it? I used IE for convenience sake. Try the following code...it seemed to work...
Code:
<xsl:stylesheet version="1.0"
xmlns:xsl="http://www.w3.org/1999/XSL/Transform">
<xsl:template match="channel">
<html>
<head>
<title>Msnbc news</title>
</head>
<body>
<h2>Msnbc News</h2>
<table border="1">
<tr bgcolor="silver">
<th align="left">Title</th>
<th align="left">URL</th>
</tr>
<xsl:for-each select="item">
<tr>
<td><xsl:value-of select="title"/></td>
<td><xsl:value-of select="link"/></td>
</tr>
</xsl:for-each>
</table>
</body>
</html>
</xsl:template>
</xsl:stylesheet>
Hope that'll help! 
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