I had exactly the same problem and I solved it.
I hava a multi value Lookup Field named "g_x00fc_ltig_x0020_in_x0020__x0028_lang", where I want to display each selection in a new line instead of the default ";" separators.
You must substitute my field name by your field name.
I went into SharePoint Designer 2010 and opened my .aspx view.
In the code I searched for the "xsl:template" tag (last line in my code snippet) and copied the following code just in front of the searched tag:
<xsl:template name="string-replace-all">
<xsl:param name="text" />
<xsl:param name="replace" />
<xsl:param name="by" />
<xsl:choose>
<xsl:when test="contains($text, $replace)">
<xsl:value-of select="substring-before($text,$replace)" />
<xsl:value-of select="$by" />
<xsl:call-template name="string-replace-all">
<xsl:with-param name="text" select="substring-after($text,$replace)" />
<xsl:with-param name="replace" select="$replace" />
<xsl:with-param name="by" select="$by" />
</xsl:call-template>
</xsl:when>
<xsl:otherwise>
<xsl:value-of select="$text" />
</xsl:otherwise>
</xsl:choose>
<xsl:template name="FieldRef_printTableCell_EcbAllowed.g_x00fc_ltig_x0020_in_x0020__x0028_lang_x0029_" match="FieldRef[@Name='g_x00fc_ltig_x0020_in_x0020__x0028_lang_x0029_']" mode="printTableCellEcbAllowed" ddwrt:dvt_mode="body" ddwrt:ghost="" xmlns:ddwrt2="urn:frontpage:internal">
<xsl:param name="thisNode" select="."/>
<xsl:param name="class" />
<td>
<xsl:if test="@ClassInfo='Menu' or @ListItemMenu='TRUE'">
<xsl:attribute name="height">100%</xsl:attribute>
<xsl:attribute name="onmouseover">OnChildItem(this)</xsl:attribute>
</xsl:if>
<xsl:attribute name="class">
<xsl:call-template name="getTDClassValue">
<xsl:with-param name="class" select="$class" />
<xsl:with-param name="Type" select="@Type"/>
<xsl:with-param name="ClassInfo" select="@ClassInfo"/>
</xsl:call-template>
</xsl:attribute>
<xsl:variable name="thisRow">
<xsl:call-template name="string-replace-all">
<xsl:with-param name="text" select="$thisNode/@*[name()=current()/@Name]"/>
<xsl:with-param name="replace" select="';'" />
<xsl:with-param name="by" select="'<br />'" />
</xsl:call-template>
</xsl:variable>
<xsl:value-of select="$thisRow" disable-output-escaping="yes"/>
</td>
</xsl:template>
The first template in the code is the given string-replace function from your reference.
The second template I have generated by formatting my column with a background color in SharePoint Designer and removed the "style" and "color" from the tag and additinally some other not needed code lines.
I added the code between and including the lines containing "thisRow".
Save it, and voila – it works.
Kind regards
Ernst