Index: genshi/template/markup.py
===================================================================
--- genshi/template/markup.py	(revision 462)
+++ genshi/template/markup.py	(working copy)
@@ -78,6 +78,7 @@
                                encoding=encoding)
 
         for kind, data, pos in source:
+            s = (stream, fallback_stream)[in_fallback]
 
             if kind is START_NS:
                 # Strip out the namespace declaration for template directives
@@ -143,7 +144,7 @@
                         fallback_stream = []
 
                 else:
-                    stream.append((kind, (tag, new_attrs), pos))
+                    s.append((kind, (tag, new_attrs), pos))
 
                 depth += 1
 
@@ -173,14 +174,14 @@
             elif kind is TEXT:
                 for kind, data, pos in self._interpolate(data, self.basedir,
                                                          *pos):
-                    stream.append((kind, data, pos))
+                    s.append((kind, data, pos))
 
             elif kind is COMMENT:
                 if not data.lstrip().startswith('!'):
-                    stream.append((kind, data, pos))
+                    s.append((kind, data, pos))
 
             else:
-                stream.append((kind, data, pos))
+                s.append((kind, data, pos))
 
         return stream