The 'code' element is not converted to latex; which is
part of the DocBook 4.3 spec. Actually i'm not even
sure that you officially support the 4.3 spec, but
anyways...
Here's a template:
<xsl:template match="code">
<xsl:text>{\tt{</xsl:text><xsl:apply-templates/><xsl:text>}}</xsl:text>
</xsl:template>
I'm *very* new to latex, so \tt may not be an
appropriate latex tag.
cheers (quite impressed with it otherwise),
timbo.