Сортировка сначала по тексту, затем по номеру:
XSLT 1.0
<xsl:stylesheet version="1.0"
xmlns:xsl="http://www.w3.org/1999/XSL/Transform">
<xsl:output method="xml" version="1.0" encoding="UTF-8" indent="yes"/>
<xsl:strip-space elements="*"/>
<xsl:template match="/LEVEL">
<xsl:copy>
<xsl:for-each select="PARENT">
<xsl:sort select="translate(CHILD, '0123456789', '')" data-type="text" order="ascending"/>
<xsl:sort select="translate(CHILD, translate(CHILD, '0123456789', ''), '')" data-type="number" order="ascending"/>
<xsl:copy-of select="CHILD"/>
</xsl:for-each>
</xsl:copy>
</xsl:template>
</xsl:stylesheet>
Результат
<?xml version="1.0" encoding="UTF-8"?>
<LEVEL>
<CHILD>1</CHILD>
<CHILD>2</CHILD>
<CHILD>4</CHILD>
<CHILD>9</CHILD>
<CHILD>11</CHILD>
<CHILD>A1</CHILD>
<CHILD>A1</CHILD>
<CHILD>A2</CHILD>
<CHILD>C3</CHILD>
<CHILD>CD1234</CHILD>
<CHILD>D1</CHILD>
</LEVEL>