Have you benchmarked recent XSLT solutions for this pre-conceived "slowness"? They are very very fast these days...
As far as the advantages, I'll paraphrase Robin Berjon on this... The advantage he sees of using XSLT is that it's a very well thought out system, with a lot of history (DSSSL) behind it. With XSLT you aren't constrained by flat structures like many templating systems - and by that I include hierarchies where you have to "manually" iterate over the tree. With XSLT you just declare what bits of your data are meant to look like, and run it. But it's more than that... With XSLT you are not creating text. That is what every single other perl templating solution does - it takes some data and a template and generates text. This does not lead to efficient pipelining (which is a technique that most people in the perl world aren't really familiar with, because of this weakness, but a very useful technique nonetheless). With XSLT you take some a data structure, and a template which describes a new data structure, and you get a data structure at the end of it. Not text (and not really XML either - you have to think outside of that box :-)
Oh, and one other benefit: multiple vendors.
Matt (with a v.fat C.V.) ;-)
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