There are at least two Ruby library gems that provide bindings to the same C-based XSLT engine: libxslt.
For the record, I'm using Ruby/XSLT by Gregoire Lejeune. Its available on Debian, so that's how I got started with it.
I still have some problems with it though. As a debian package, it is require 'xml/libxslt'. As a gem, on heroku for example, it is require 'xml/xslt'.
No need to get to the bottom of the cause - Debian Squeeze does not include libxslt-ruby, so now I'm doing this:
sudo gem install ruby-xslt
And yet another gotcha! => ruby-xslt won't install or compile with 1.9.1. Thankfully Radar forked it and patched it to do so!