While I've been inactive in this project's development over the past three years, the software landscape of course has not stayed frozen... it has changed.
Two events in particular are note worthy.
First, newer versions of AltovaXML, post 2012, are now not free, but are instead part of the commercial "RaptorXML" suite, so that leaves you with SAXON-HE as the only free XSLT 2.0 processor to use.
Second, and much more importantly though, SAXON NOW HAS A FRICKIN PHP BINDING, as part of the equally awesome "SAXON/C" project. You can find it here:
http://www.saxonica.com/saxon-c/index.xml
With this in place, XSLT 2.0 is now not just "close at hand", as it seemed ever since I started this project, no. It's now HERE, already. No more need for your host to give you exec rights that probably made them queezy anyway, or for them to install a separate TomCat web server for the JavaBridge to run on.
All one must do now is install a PECL-style extension... yes, that's probably not good news for anyone on a free shared hosting server where the host denies to install anything for anyone, but for most other hosts - including VPS and just hosts that are cool enough to do these things when you ask - that's the best thing you could hope for, since we're not only talking about any XSLT 2.0 support in PHP (which is itself good news), but also about it being at the best possible performance.
The project is still in an early alpha stage, but since it's the obvious direction things MUST go to, I encourage you to try it out, and provide feedback in any of the communication channels they mention.
Bye bye.