This...
<records>
<contact id="0001">
<title>Mr</title>
<forename>John</forename>
<surname>Smith</surname>
</contact>
<contact id="0002">
<title>Dr</title>
<forename>Amy</forename>
<surname>Jones</surname>
</contact>
...
</records>
to this...
Jones,
Amy (Dr)
Brian (Mr)
Smith,
Fiona (Ms)
John (Mr)
use this...
<xsl:key name="contacts-by-surname" match="contact" use="surname" />
<xsl:template match="records">
<xsl:for-each select="contact[count(. | key('contacts-by-surname', surname)[1]) = 1]">
<xsl:sort select="surname" />
<xsl:value-of select="surname" />,<br />
<xsl:for-each select="key('contacts-by-surname', surname)">
<xsl:sort select="forename" />
<xsl:value-of select="forename" /> (<xsl:value-of select="title" />)<br />
</xsl:for-each>
</xsl:for-each>
</xsl:template>