A recent post XSLT 2.0 and Microsoft from Dare Obasanjo provoked quite a reaction - some people (me included) would obviously like to see Microsoft develop XSLT 2 processor as soon as possible. The specification should enter a W3C “recommended” status in a few months, so the time is right.

Considering the great XSLT 1.0-to-IL compiler Microsoft gave us with the .NET Framework 2.0, I have high hopes for the XSLT 2.0 on the .NET platform. But it's gonna take some time until we see this - at best we can hope for it in the time frame of the next Visual Studio assuming it will coincide with the next .NET Framework version (XSLT processor belongs to the framework and not the IDE).

In the meantime, you have few alternatives. Both Saxonica (Michael Kay's company, he's probably the authority on XSLT and the editor of W3C XSLT 2.o  group) and Altova (company behind arguably the best XML tools out there) have compliant implementations. Since XSLT processor is the main business for Saxonica they only offer non schema-aware version for free. And it's Java, so it's not directly usable from a .NET application.

Altova however sells many XML tools (XMLSpy and the family) so for them it is not a big deal to give away the processor - it should raise the brand awareness and sell more copies of their tools. Therefore they are giving away schema-aware XSLT 2.0 processor complete with XQuery 1.0 and XPath 2.0! Even better - it's COM based and directly usable from any .NET application.

I have tried both implementations with some of the Zvon's tutorials (great XML related site if you haven't seen it yet) and it looks like Saxon-B (the free version I mentioned above) is definitely better - some of the simple cases AltovaXML did not transform correctly. I will have to throw more complicated stylesheets at both to draw any conclusion but the apps are free and can be used today. You don't even have to use command line versions of AltovaXML - they are giving away free (scaled down of course) XMLSpy version for home use.