of these three:
Performance?
Ease of use?
browser support?
templates are probably better at each than xsl, but if your site wants to use the same info in differnet ways, such as wml + html + xml for other sites (xmlrpc like) then xml+xsl may be better for you.
Personally, I'm now using PEAR's HTML/IT.php IntegratedTemplate class and recommend it over fast templates.