Last I heard, browser vendors are waiting to be able to drop XSLT.
XSLT is a functional language with a very weird syntax, and a very domain specific default mode - transforming XML trees in streaming mode. XSLT was the translation of SGML's DSSSL [1] into an XML syntax, DSSSL is (was?) a subset of Scheme.
XSLT is actually a pretty good tool for streaming "push" templating - writing a stylesheet that generically specifies how to handle certain kinds of elements. It really sucks at "pull" templating, i.e. writing the result and indicating where data from the input should go, how most templating languages work.
It turns out "pull" templating matches the mental model of most people much better, is easier to understand, and is in particular useful for ye olde typical website. On top of that, it inherited XML with all its baggage, and is forever coupled to that one particular data model.
I'd still use XSLT if I had to format something like a book, or a massive manual. Put for formatting programmatic results in a web app, I never would.
It turns out "pull" templating matches the mental model of most people much better, is easier to understand, and is in particular useful for ye olde typical website.
And for that I found I was happier using a streaming parser and writing event handlers to grab data as it went by and formatting as needed in my handler code.
XSLT might be a good fit if your logic depends on whole-document handling. For example, you need to know how many foo elements there are in order to generate a TOC. Or something where you're explicitly working of irregularities and optional data so you need to have the whole XML doc at hand and apply your transformations "all at once" so to speak.
But hey, XSLT 1.0 runs in like, every browser in the world, and is practically designed for emitting DOM. I wonder why it's not used more often.