I'm really annoyed by the fact that Xerces-C and Xalan-C doesn't evolve anymore. No support of XSLT 2.0 and XPath 2.0, also 3 years after the final specification release ...
Unfortunately, we don't have many choices ... I think that libxml and libxslt are awful libraries and not up to date as well. I found few weeks ago a .NET and Java XSLT 2.0 processor: Saxon. I thought I should give it a try especially to make G-Truc Creation build on MacOS X!
Saxon is a great tools, very accurate conformance wise, but it's probably because it's Java based: It is awfully slow!
1 minute is already quite long when I develop on the website, so that I just build the appropriate files. So now 16 minutes with Saxon ... I'm probably going to keep using Xalan for a while.
For years I have been using Xerces and Xalan for my website but also for varius projects. They are such great libraries and once again I would love to see them maintain at its original level of excellence.