The new release doesn't seem to support the style part of XSL, only 
the transformation part (but it does seem to be nearly 100% 
compliant, or at least as far as I've had time to check). It will, 
for example, choke on process-children (unless someone else has 
got it to work). 
I have managed to get it to work with simple files such as 
these: 
The XML file:
<?xml version="1.0"?>
<?xml:stylesheet type="text/xsl" href="ietest.xsl"?>
<books>
  <book>
    <title>Pierre: The Ambiguities</title>
    <author>Herman Melville</author>
    <price>9.99</price>
  </book>
  <book>
    <title>Heart of Darkness</title>
    <author>Joseph Conrad</author>
    <price>12.99</price>
  </book>
  <book>
    <title>Arrowsmith</title>
    <author>Sinclair Lewis</author>
    <price>8.99</price>
  </book>
  <book>
    <title>Oedipus Rex</title>
    <author>Sophocles</author>
    <price>8.99</price>
  </book>
  <book>
    <title>The Secret Sharer and Other Stories</title>
    <author>Joseph Conrad</author>
    <price>13.99</price>
  </book>
  <book>
    <title>The Republic</title>
    <author>Plato</author>
    <price>12.99</price>
  </book>
  <book>
    <title>The Republic</title>
    <author>Plato</author>
    <price>15.99</price>
  </book>
  <book>
    <title>Pragmatism</title>
    <author>William James</author>
    <price>15.99</price>
  </book>
</books>
and the XSL file:
<DIV xmlns:xsl="http://www.w3.org/TR/WD-xsl">
<TABLE style="table-layout:fixed" BORDER="2" CELLSPACING="2">
  <col width="300"/>
  <col width="300"/>
  <col width="100"/>
  <THEAD>
    <TH>TITLE</TH><TH>AUTHOR</TH><TH>PRICE</TH></THEAD>
  <xsl:for-each select="books/book">
  <TR>
    <TD><SPAN><xsl:value-of select="title"/></SPAN></TD>
    <TD><SPAN><xsl:value-of select="author"/></SPAN></TD>
    <TD><SPAN><xsl:value-of select="price"/></SPAN></TD>
  </TR>
  </xsl:for-each>
</TABLE>
</DIV>
(I quickly hacked these files from the sources available on the SBN 
site). 
Without a style sheet, it shows a 'raw' XML tree that you can expand 
and contract. The DSO and data island mechanisms appear to be intact 
(bar a few minor changes). 
It also appears to correctly parse and validate XML code against a 
DTD; the DTD display is suppressed. 
I'm now going to tackle XLink and XPointer, although I suspect I know 
what the results will be. 
Simon.