Filtering on multiple params in XSL

Gertone helped me a lot with this and I thought I had it, but I'm still stumped.  I'm trying to use XSL to filter on multiple elements from the following XML file.  

<NODES>
  <APPLICANT>
    <NAME>Sean McGowan</NAME>
    <PREFERRED></PREFERRED>
    <FLAGGED>1</FLAGGED>
  </APPLICANT>
  <APPLICANT>
    <NAME>Carol Gillette</NAME>
    <PREFERRED>1</PREFERRED>
    <FLAGGED></FLAGGED>
</NODES>
 
I'm passing parameters to XSL with the names of the elements I want to match and the values they should match.  The hard part is that I want a rows to display whenever EITHER of the filter elements matches the desired value.   Here are the params:

  <xsl:param name="filter1" />
  <xsl:param name="filter1value" />
  <xsl:param name="filter2" />
  <xsl:param name="filter2value" />

And here is my select statement:

<xsl:for-each select="//APPLICANT[
         *      [(name() = $filter1 and . = $filter1value) or (string-length($filter1) = 0)]
                [(name() = $filter2 and . = $filter2value) or (string-length($filter2) = 0)]
]">

I pass the parameters $filter1 = "FLAGGED" &  $filter1value = "1", for example.
This works fine when either of the parameters are set, but returns no rows when both are set by passing $filter2 = "PREFERRED" &  $filter2value = "1", too .  I could use an OR statement instead, such as:

<xsl:for-each select="//APPLICANT[
         *      [(name() = $filter1 and . = $filter1value) or (string-length($filter1) = 0)]
         |*    [(name() = $filter2 and . = $filter2value) or (string-length($filter2) = 0)]
]">

But this returns true for all rows when one of the parameters isn't set.  I need to be able to filter on either or both parameters.  I think the problem with the AND method is that the name() function is looking at the XML elements one at a time.  If name() = $filter1 in the first predicate, it won't in the second.  What can I do?