Features:
a) Tag Completion [must have].
b) Syntax Highlighting [preferable]
c) Auto Indent [preferable]
d) XSL Transformation Output [preferable]
These are the main requirements. Other addons will be added advantage.
Currently I am using Visual Web Developer for XML editing. I found some hacks on the net for adding XSL tag completion to the default Intellisense but I couldn't get it working on my setup.