There is something wrong with your encoding, you're using a zero instead of an 'O'
Use the following:
="1.0"="ISO-8859-1"
<xsl:stylesheet version="1.0"
xmlns:xsl="http://www.w3.org/1999/XSL/Transform">
<xsl:template match="/collection">
<html>
<body>
<table border="1" >
<tr>
<th>Title</th>
<th>Year</th>
<th>Genre</th>
</tr>
<xsl:for-each select="film">
<tr>
<td><xsl:value-of select="title" /></td>
<td><xsl:value-of select="year" /></td>
<td><xsl:value-of select="genre" /></td>
</tr>
</xsl:for-each>
</table>
</body>
</html>
</xsl:template>
</xsl:stylesheet>
Also, you have an orphaned </movie> tag