I think I've found a bug.
<task>
<templates>
<template path="CollectionTemplates\IList.cst" outputPath="OutputCode\Defaults\ILists.cs"/>
If outputPath tag has spaces, output isn't generated...
I set my outputPath = c:\documents and settings\mike\ILists.cs and no output is generated.
Then I set my outputPath = c:\docum~1\mike\ILists.cs and everything works fine
the template path can have spaces so it appears to be a bug with the outputPath parsing only.