XML : xml show output after xsl transformation

I am having problems with XML. I am trying to transform one xml doc to another using xslt. I do this using notepad++ and IE to show the output. But I am facing a problem because I can't see the tags. I only get raw text and no xml when I transform it.

This is my xml code (example.xml):

  <?xml version="1.0" encoding="UTF-8"?>  <?xml-stylesheet href="test.xsl"?>  <root>      <element>          This is some text to test!!!      </element>      <element attr="someText">          This is some more text to test xml...      </element>  </root>    

This is my stylesheet (test.xsl):

  <xsl:stylesheet version="1.0"  xmlns:xsl="http://www.w3.org/1999/XSL/Transform">      <xsl:template match="root">          <xsl:for-each select="element">              <newElement>                  <xsl:value-of select="."/>              </newElement>          </xsl:for-each>      </xsl:template>  </xsl:stylesheet>    

What I would like to see when I open example.xml in IE is:

  <?xml version="1.0" encoding="UTF-8"?>  <root>      <newElement> This is some text to test!!! </newElement>      <newElement attr="someText"> This is some more text to test xml... </newElement>  </root>    

But I only see this when I open example.xml in IE:

  This is some text to test!!!   This is some more text to test xml...     

So I actually can't see the tags. What I would like to see is an xml tree. What am I doing wrong?

Another question I have: is it possible to save the new transformed xml document to another xml file?

I can only use xslt 1.0 and xpath 1.0.