The W3C XQuery and XSL working groups have published eight candidate recommendations for XQuery, XSLT 2 and XPath 2:
Two others have been updated but have not yet reached last call:
Michael Kay has released version 8.6 of Saxon, his XSLT 2.0 and XQuery processor. This release updates Saxon to support the latest candidate recommedations of XSLT 2 and XQuery. Saxon is published in two versions for both of which Java 1.4 or later is required. Saxon 8.6B is an open source product published under the Mozilla Public License 1.0 that "implements the 'basic' conformance level for XSLT 2.0 and XQuery." Saxon 8.6SA is a £250.00 payware version that "allows stylesheets and queries to import an XML Schema, to validate input and output trees against a schema, and to select elements and attributes based on their schema-defined type. Saxon-SA also incorporates a free-standard XML Schema validator. In addition Saxon-SA incorporates some advanced extensions not available in the Saxon-B product. These include a try/catch capability for catching dynamic errors, improved error diagnostics, support for higher-order functions, and additional facilities in XQuery including support for grouping, advanced regular expression analysis, and formatting of dates and numbers."
Toni Uusitalo has released Parsifal 1.0, a minimal, non-validating XML parser written in ANSI C. The API is based on SAX2. Parsifal is in the public domain.