XSLT is a very powerful technology that is only recently finding a niche for itself. As with many new technologies, its biggest limitation is acceptance: many browsers just do not support XSLT processing, and probably will not support it within the foreseeable future.
Even the most basic XML implementation can provide instant return on investment, simply by making your content available in a pure format. Furthermore, you can add more powerful XSLT processing at a later date.
Perhaps the most popular use for server-side XSLT parsing is serving a particular content type (e.g.: WML for WAP phones) based upon the user agent received.