what is   and why is it causing a weird character on my html output

Question

I have the following code in XSL:

<xsl:value-of select="./state" />&#160;<xsl:value-of select="./zip" /><br />

It now produces the following:

Not quire sure what is going on here and how to remove the weird character. I think its a character entity for a space? I really am new to xsl and what to do. any help appreciated