How to select data from multiple nodes based on multiple condition in xslt?

I want to display the parts that are red and where supplier id is 1.

Your question is not entirely clear. The following stylesheet selects catalog entries where the sid is 1 and the corresponding part's color is "red".

XSLT 1.0

<xsl:stylesheet version="1.0" 
xmlns:xsl="http://www.w3.org/1999/XSL/Transform">
<xsl:output method="xml" version="1.0" encoding="UTF-8" indent="yes"/>

<xsl:key name="part" match="part" use="pid" />
<xsl:key name="supplier" match="supply" use="sid" />

<xsl:template match="/table">
    <items>
        <xsl:for-each select="catalogs/catalog[sid=1 and key('part', pid)/color='red']">
            <item>
                <xsl:copy-of select="key('part', pid)/pname"/>
                <xsl:copy-of select="key('supplier', sid)/sname"/>
                <xsl:copy-of select="cost"/>
            </item>
        </xsl:for-each>
    </items>
</xsl:template>

</xsl:stylesheet> 

Test input

<table>
   <suppliers>
      <supply>
         <sid>1</sid>
         <sname>supplier A</sname>
         <address>address A</address>
      </supply>
      <supply>
         <sid>2</sid>
         <sname>supplier B</sname>
         <address>address B</address>
      </supply>
   </suppliers>
   <parts>
      <part>
         <pid>1</pid>
         <pname>part A</pname>
         <color>red</color>
      </part>
      <part>
         <pid>2</pid>
         <pname>part B</pname>
         <color>blue</color>
      </part>
   </parts>
   <catalogs>
      <catalog>
         <sid>1</sid>
         <pid>1</pid>
         <cost>101</cost>
      </catalog>
      <catalog>
         <sid>1</sid>
         <pid>2</pid>
         <cost>102</cost>
      </catalog>
      <catalog>
         <sid>2</sid>
         <pid>1</pid>
         <cost>103</cost>
      </catalog>
     <catalog>
         <sid>2</sid>
         <pid>2</pid>
         <cost>104</cost>
      </catalog>
   </catalogs>
</table>

Result

<?xml version="1.0" encoding="UTF-8"?>
<items>
   <item>
      <pname>part A</pname>
      <sname>supplier A</sname>
      <cost>101</cost>
   </item>
</items>