You would be amazed at what it is capable of. Take for example a generic RSS feed. The address returns an XML document containing the RSS feed, but the author can add a link to an XML stylesheet at the top that transforms the XML into HTML, such as a table of links. You can point your aggregator and browser at the same address and avoid complicated server side scripting. Convert between schemas, into HTML, plain text, PDF, etc etc.
http://en.wikipedia.org/wiki/XSL_Transformations