See also: Saxon based xslt 2.0 service
For now it is very rudimentary in its capabilities and likely to change without notice. It is a simple wrapper (source) around James Clark's XT and currently using his XP parser although there have been times where different engines and parsers were used when the underlying servlet was replaced with another. There are plans for a more capable online realtime XSLT service, when these plans gel they will be linked to from here.
In addition to realtime transformations, there will be work in the nearer term on a event and caching driven XSLT service drawing on W3C's Evolving Mirroring System, CSV hooks and knowledge of W3C's publishing practices. What some people would call a content management system.W3C maintains this for their own use, it is available for public use (see conditions) but without warranty.
The default values in the form point to the XML source of the second edition of the XML 1.0 Recommendation, as well as the stylesheet used to format the W3C recommendations to HTML. Running the transformation will display the HTML version of the spec, similar to the one in the Technical Reports section.
Another way to do XSLT is to use a browser that can perform transformations. Then, if you load an XML file that points to an XSLT stylesheet (example here) the browser will do the transformation and display the result HTML. To this date, two browsers support: XSLT 1.0: