Hello Michael,
I read your topic, maybe it is a little late, but I know the answer. Few months ago I had a problem like yours. I had got a product from RenderX, which name was XEP. Believe me it is perfect for formatting xml, xsl fo to xhtml.
For my company I needed to format pdfs, and XEP helped me in that too:). You can download trial version from www.RenderX.com.
Something more.. If have questions associated with XEP, post your questions in RenderX' forum, where you can got the answers:
http://cooltools.renderx.com
Regards, Vardges