Thanks to some useful comments from Norm Walsh, I was able to make some major strides in transforming iTunes' pracically useless XML.
Due to the way Apple chose to structure the iTunes XML playlist export, I ran into some problems with Norm's approach: I kept getting invalid QName errors on some of the elements. Turns out, it was trying to create element names based only on the track number.
I hacked around and here is the resulting stylesheet: itunes.xslt
I plan to handle most of the formatting with CSS at a later date.
The only problem with this XSL, is that I've now lost the order of the original playlist. I imagine this could be solved with keys and sorting, but I just don't have time to mess with this further.
Hope you enjoy this! I'll be posting my playlists much more easily now.
BTW, I used Michael Kay's Saxon 8.0 for the transformations!
See also: Music