This is an example script on how to do XSLT transformations in Python 2.6 through the Gnome libxml XML C parser and toolkit. The relative fast C library is available on multiple platforms but you will also need Python bindings for libxml2 and libxslt. There is a handy libxml2 and libxslt Python bindings installer for Windows which also includes the C libraries in DLL form.

#!/usr/bin/env python
# this is libxml_xslt_transform_example.py

"""
Example XSLT transformation script that uses the Gnome libxml XML C parser and toolkit

On Windows, Python can make use of the libxml2 and libxslt C libraries (http://www.xmlsoft.org/) through the
following Python bindings http://users.skynet.be/sbi/libxml-python/. Other bindings can be found here 
http://codespeak.net/lxml/. The Windows installer includes the C libraries in form of DLLs.
Most Linux distributions already include the C libraries.

Usage:

Python 2.6
Wolfgang Grunberg
Arizona Geological Survey
11/09/2009
"""

# Library Imports
import sys
import libxml2      # binding to C library of same name http://www.xmlsoft.org
import libxslt      # binding to C library of same name http://www.xmlsoft.org


# Some variables
transform_xslt = "C:\\tmp\\transform.xslt"
source_xml = "C:\\tmp\\source.xml"
out_xml = "C:\\tmp\\out.xml"

def xslt_transform():
    styledoc = libxml2.parseFile(transform_xslt)
    style = libxslt.parseStylesheetDoc(styledoc)
    doc = libxml2.parseFile(source_xml)
    # XSLT transform with parameters
    #result = style.applyStylesheet(doc, {"parameter1":"'1'","parameter2":"'string'"})
    # XSLT transform without parameters
    result = style.applyStylesheet(doc, None)   #
    style.saveResultToFilename(out_xml, result, 0)      # save to file
    result_xml = style.saveResultToString(result)       # save to string
    
    # cleanup - you are dealing with C libraries 
    style.freeStylesheet()
    doc.freeDoc()
    result.freeDoc()
    
    print result_xml

if __name__=="__main__":
    xslt_transform()

Files: 

libxml_xslt_transform_example.py_.txt