xsl transformation xmlwriter output only returning text C#

Question

My output from this transformation only includes the text, but I want the HTML and text output. What do I need to change to do that?

I'm using VS 2010

current example output:

Jones Martin Kelley Marshall

Note I have this in the xsl too, but it wasn't showing in my code example:

 xsl:output
    standalone="no"
    method="xml"
    indent="yes"
    omit-xml-declaration="no"
    version="1.0" 

xsl:

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

  <xsl:template match="/">

    <xsl:for-each select="/people">

      <div class="lastnames">
        <ul>
          <li>
            <xsl:value-of select="lastname" disable-output-escaping="yes" />
          </li>
        </ul>
      </div>

    </xsl:for-each>
  </xsl:template>

</xsl:stylesheet>

C#:

XslCompiledTransform xslt = new XslCompiledTransform();

xslt.Load(xslPath);

using (XmlWriter writer = XmlWriter.Create(outPath + 
                                          fileName + 
                                          "." +
                                            fileExt
                                         , xslt.OutputSettings))
{
    xslt.Transform(fileNode, null, writer);
    writer.Flush();
    writer.Close();
}

Answer 1

This simple transformation:

<xsl:stylesheet version="1.0" xmlns:xsl="http://www.w3.org/1999/XSL/Transform">
 <xsl:output omit-xml-declaration="yes" indent="yes"/>
 <xsl:strip-space elements="*"/>

 <xsl:template match="people">
  <div class="lastnames">
   <ul>
     <xsl:apply-templates/>
   </ul>
  </div>
 </xsl:template>

 <xsl:template match="lastname">
  <li><xsl:apply-templates/></li>
 </xsl:template>
</xsl:stylesheet>

when applied on this XML document (non has been provided !!!):

<people>
 <lastname>Jones</lastname>
 <lastname>Martin</lastname>
 <lastname>Kelley</lastname>
 <lastname>Marshall</lastname>
</people>

produces the wanted, correct result:

<div class="lastnames">
  <ul>
    <li>Jones</li>
    <li>Martin</li>
    <li>Kelley</li>
    <li>Marshall</li>
  </ul>
</div>

And it is displayed by the browser as expected:

• Jones
• Martin
• Kelley
• Marshall