I think that would work. But a shorter way is this:
<xsl:value-of select="PHOTO_SMALL" />
If there is no PHOTO_SMALL element under the context node, then the result of this is an empty
string.
However if for example you wanted to put an <img href="PHOTO_SMALL"> element in the output only if there was a PHOTO_SMALL element to use, then you would need the <xsl:if> element.
Anyway, try it and see.