I don't like XML, much less its derivative/associated file formats. But if I needed to transform from XML to XML, I would almost certainly use an XSLT stylesheet. It's the right tool for the job.

I think it is outdated. It is fairly complicated, but what really annoys me is the "entity" problem. That vision of passing a document through a series of XSLT filters does not work, because the defined entities get transformed after the first pass (ie something like   don't remember correct syntax). Maybe I just couldn't figure out how to make it work though - which leads back to point #1, too complicated.