Supported XSLT Features
The implementation of MSXML 6.0 is in full compliance with the XSL Transformations (XSLT) Version 1.0 W3C Recommendation, 16 November 1999, and with the XML Path Language (XPath) Version 1.0 W3C Recommendation, 16 November 1999.
In addition, MSXML 6.0 maintains backward compatibility with Section 2 of the December 1998 XSL Working Draft of the Extensible Stylesheet Language (XSL). It does not support XSL formatting objects.
Where the XSLT recommendation provides a fallback behavior in cases of error (for example, two matching templates with the same priority), MSXML performs the fallback behavior.
MSXML provides two mechanisms for implementing extension functions: embedded script implementations (<msxsl:script>) and external objects (addObject). MSXML does not provide a mechanism for implementing extension elements.
Other Resources
The World Wide Web Consortium (W3C) Web site at http://www.w3.org provides the following publications that will be of interest in understanding XSLT features in detail.
XSL Transformations (XSLT) Version 1.0
XML Path Language (XPath) Version 1.0