(PHP 4 >= 4.0.3)
xslt_create — Erzeugt einen neuen XSLT-Prozessor
Erzeugt eine neue XSLT-Prozessor-Ressource für die Verarbeitung durch andere XSLT-Funktionen und gibt sie zurück.
Gibt bei Erfolg einen XSLT-Prozessor-Linkidentifier zurück, im Fehlerfall wird FALSE zurückgegeben.
Beispiel #1 xslt_create()-Beispiel
<?php
function xml2html($xmldata, $xsl)
{
    /* $xmldata -> Ihr XML */
    /* $xsl -> XSLT-Datei */
    $path = 'include';
    $arguments = array('/_xml' => $xmldata);
    $xsltproc = xslt_create();
    xslt_set_encoding($xsltproc, 'ISO-8859-1');
    $html =
        xslt_process($xsltproc, 'arg:/_xml', "$path/$xsl", NULL, $arguments);
    if (empty($html)) {
       die('XSLT processing error: '. xslt_error($xsltproc));
    }
    xslt_free($xsltproc);
    return $html;
}
?>
Hello,
I changed the function from myadzel (?) a little bit, so that it now correctly uses either a file OR a string as parameter - WITHOUT producing PHP warnings. See here:
<?php
function xslt ($xml, $xsl) {
    $xh = @xslt_create();
    $args['xml'] = ( file_exists( $xml ) )?join ('', file ($xml)):$xml;
    $args['xsl'] = ( file_exists( $xsl ) )?join ('', file ($xsl)):$xsl;
    // try with a string
    $result = @xslt_process ($xh, 'arg:/xml', 'arg:/xsl', NULL, $args);
    // try with resource
    if (!$result) { $result = @xslt_process ($xh, $xml, $xsl); }
    @xslt_free ($xh);
    return $result;
}
?>
Examples:
echo xslt ('./index.xml', './index.xsl');
echo xslt ('<test><example>An example!</example></test>', './index.xsl');
Hardly can I find this. But, those required dll is not included in the package and no link for download. 
It's a pitty that no discussion about this within php.net
  Note   to   Win32   Users:     In   order   to   enable   this   module   on   a   Windows   environment,   you   must   copy   several   files   from   the   DLL   folder   of   the   PHP/Win32   binary   package   to   the   SYSTEM32   folder   of   your   windows   machine.   (Ex:   C:\WINNT\SYSTEM32   or   C:\WINDOWS\SYSTEM32).   For   PHP   <=   4.2.0   copy   sablot.dll     and   expat.dll   to   your   SYSTEM32   folder.   For   PHP   >=   4.2.1   copy   sablot.dll,   expat.dll   and   iconv.dll   to   your   SYSTEM32   folder.
All for a long time know about a problem xslt-transformation in php.
We shall try a trivial way, knowing, that xslt_process () accepts string or resources in it's parameters.
function xslt ($xml, $xsl) {
    $xh = @xslt_create();
    $args['xml'] = join ('', file ($xml));
    $args['xsl'] = join ('', file ($xsl));
    // try with a string
    $result = @xslt_process ($xh, 'arg:/xml', 'arg:/xsl', NULL, $args);
    // try with resource
    if (!$result) { $result = @xslt_process ($xh, $xml, $xsl); }
    @xslt_free ($xh);
    return $result;
}
For example: echo xslt ('./index.xml', './index.xsl');
It should be noted that xslt_create() will return FALSE in the case of failure (Sablotron processor could not be created). 
This, obtained from looking at the source code extension.
In order to pass PHP variables into an XSL document you need to do the following:
Firstly I created the following function to use:
function GetXHTML($sXML, $sXSL, $aParameters)
{
    $hXML = xslt_create();
    $aArguments = array('/_xml' => $sXML, '/_xsl' => $sXSL);
    $sXHTML = xslt_process($hXML, 'arg:/_xml', 'arg:/_xsl', NULL, $aArguments, $aParameters);
    xslt_free($hXML);
    return $sXHTML;
}
Then call it like thus, passing the XML and XSL as a string with the final parameter being an array which can contain as many values as you wish to pass in:
$sXHTML = GetXHTML($sXML, $sXSL, array("age"=>"26"));
Then in the XSL document you need the following:
<xsl:param name="age" />
Then where you want to display the value of age you do this:
<xsl:value-of select="$age" />
Thanks now.