I use XSLT extensively, for a custom MVC style front-end. The model is "serialized" to xml (not via xml serializaiton), and then converted to html via xslt. The advantage over ASP.NET lie in the natural integration with XPath, and the more rigorous well-formedness requirements (it's much easier to reason about document structure in xslt than in most other languages).
Unfortunately, the language contains several limitations (for example, the ability to transform the output of another transform) which mean that it's occasionally frustrating to work with.
Nevertheless, the easily achievable, strongly enforced separation of concerns which it grants aren't something I see another technology providing right now - so for document transforms it's still something I'd recommend.
