Once you change the transformation type to text/XML, you can use macros - please see the macro documentation. The macros are basically coping the API - they are in 90% the same as you would use methods in C# code.
Is the "ApplicationList" a resource string you created in the Localization app? Or, why are you trying to use "GetResourceString"?
In your case you can use macro like {%FieldName%} to get the field's value. And if you want to remove the pipe characters, use C# standard string manipulation methods like Replace - {%FieldName.Replace("|", " ")%}