There is an XSLT extension for PHP:

http://devzone.zend.com/node/view/id/1302

I think it's just a frontend to an existing XSLT processor.

I don't think PHP itself is designed with XML processing in mind; but you could write PHP script to parse XML/transfer XML segments between files/etc; probably even to transform XML.

But, I'm still not entirely clear on what you want to do..