Interesting post by Dino Fancellu on SoftwareReality.com, XSLT is Way Faster Using Java 5, talks about how by replacing Xalan by XSLTC and Crimson by Xerces Sun JDK 5.0 (1.5.0_01) is 5.59 times faster than Sun JDK 1.4.2 when performing a simple transformation. JRockit 5, BEA’s own Java 5 compatible JVM, does it even 7.88 times faster!
And it’s free, so it may be worth a look?