Conclusion

XSLT 2.0 is not 100% backwards compatible with version 1.0. Most stylesheets will convert with no changes at all, but a few will need tweaking. Moving a large application from XSLT 1.0 to 2.0 is an exercise that needs to be carefully planned, with detailed regression testing carried out to catch any obscure corner cases that might not show up immediately with the first few test runs.