for-each attribute

["xsl list" <xsl_list@xxxxxxxxxxx>]

Can anuone, please, explain the difference between the following two cases:
1)
<inside-xsl-tag>
<xsl:for-each select="in-tag/@*">
<xsl:attribute name="{name()}"><xsl:value-of select="."/></xsl:attribute>
</xsl:for-each>
</inside-xsl-tag>
This works fine, the attributes of <in-tag> are assigned to <inside-xsl-tag>

2)
<xsl:param name="it"/>
<inside-xsl-tag>
<xsl:for-each select="nodeset:nodeset($it)/in-xsl-tag/@*">
<xsl:attribute name="{name()}"><xsl:value-of select="."/></xsl:attribute>
</xsl:for-each>
</inside-xsl-tag>
Xalan complains about an illegal attributes as it tries to assign the 
attributes of <in-tag> to <xsl:for-each>

What is the difference in both cases? I am using case (1) to assign the 
attributes of tags in the XML to tags generated using the XSL. I would like 
to be able to use case (2), where within the XSL I can pass an element param 
(<xsl:with-param name="it"><in-xsl-tag a="1"/></xsl:with-param>).

Thanks,
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