it's a little difficult to troubleshoot without seeing the entire xlst, but if you are going to include javascript or jquery script in your xslt template, you need to wrap the script code in a CDATA wrapper otherwise the xslt parser will attempt to parse/process your script, most likely throwing the exception you are seeing.  You also should place your code in an xsl:attribute tag.

So, for example, if you want to include some jquery script in your xslt template, you would do the following...

<xsl:attribute name="href">

  <![CDATA[

    <script type="text/javascript">

      $(document).ready(function() {

        $("#btnSearch").click(function () {    

          (".hideme").hide();    

          });

      });

    </script>

  ]]>

</xsl:attribute>