Thanks for the response. I still couldn't get it working though. I think I have given up on executing PHP within an xml/xsl document. My focus now is learning how to pass the xml and xsl files through a PHP file, then echo out the result...
Looks like I have some reading to do.
Article on using PHP with XML and XSLT
XSLT @ PHP.net
xslt_process @ PHP.net
Download Sablotron XML toolkit
Download Expat XML Parser
Article on using expat with PHP