Thinking outloud here...
It seems to me that for presenting an XML file to screen, using XSLT or PHP really doesn't matter. Or does it? They can both take the XML data and transform it into XHTML. Since I have to use a scripting language to apply the XSL file, what are the advantages of using it over just writing a PHP file to format the data differently?
Also as I understand it (while my ignorance is showing), while some of the browsers support XLink, not all of them do. If I use XSLT, could I create a rewrite rule that would take an XLink element and create a standard HTML link?