XML is pretty amazing when it's paired with XSLT -- Firstly, read through the ORA XSLT reference guide. If you're pressed for time in the bookstore, go directly to chapter 9, the case study.
Secondly, realize that most of the modules on CPAN dealing with XML transformation are lacking (not XML parsing, mind, but transformation). Look here or here (windows) for adaptations of Gnome's XML and XSLT libraries.
They're incredibly flexible, and are so far, performed admirably regardless of what I through at them -- they allow for some of the more esoteric functions of the XSLT specification (allowing external processors to run over data, or certain namespaces, for instance), and I have yet to run into limitations.
If all you're looking for is a transformation from XML to HTML, a good style sheet will typically get you started. If you want to rearrange or reorder the way elements are displayed, use XSLT.
Also useful with XML transformation libraries is the idea of allowing users to develop their own XSL docs so that they can present data in a form useful to them -- doing this might involve running the transformation through CGI, and that might be quite expensive.
So to sum up, XSLT sounds like it's worth your time.

And regarding your example document : it seems like it'd be ripe for something similar to a cross-ref tag. For instance :

This returns the generated callback function that is a thunk to turn a WNDPROC or WNDPROC_2 signature into a call to @handle_message on this instance.

might have (e.g.) <XREF> tags around WNDPROC, WNDPROC_2 and @handle_message to provide links to other documents as appropriate.

update I meant "cascading stylesheet", to clarify.

In reply to Re: XML documentation formatting and transformations (boo) by boo_radley
in thread XML documentation formatting and transformations by John M. Dlugosz

Use:  <p> text here (a paragraph) </p>
and:  <code> code here </code>
to format your post; it's "PerlMonks-approved HTML":