Conversion is taking about half an hour on 2Ghz (Intel/AMD) Machines running
Debian/Suse Linux.
The same data/xsl is taking 42 seconds using
java -Xms64m -Xmx1500m org.apache.xalan.xslt.Process -IN a.xml -XSL E2Person.xsl
-OUT outfile

I'm seeing this with:
libxslt 1.1.8 & libxml 2.6.11 (Debian Sarge), 
libxslt 1.0.32 & libxml 2.5.10 (Suse 9.0)

using ps, I'm seeing this ram usage: it's relatively constant at ~170MB.
VSZ    RSS
176560 172460  # at time  1:54
182412 175388  # at time 10:07 

Example data is an xml input file with 105298 elements having 11 subelements
each (see below), total size of the file is 26'648'576 bytes.

<?xml version="1.0" encoding="utf-8"?>
<asx:abap xmlns:asx="http://www.sap.com/abapxml" version="1.0">
  <asx:values>
    <E2PERSON>
      <PLVAR>01</PLVAR>
      <EVTYP>E</EVTYP>
      <EVEID>50020541</EVEID>
      <ISTAT>1</ISTAT>
      <RETYP>P</RETYP>
      <RESID>01001333</RESID>
      <REBEG>2005-04-04</REBEG>
      <REEND>2005-04-04</REEND>
      <BEGUZ>10:00:00</BEGUZ>
      <ENDUZ>11:00:00</ENDUZ>
      <INSTX>X</INSTX>
    </E2PERSON>
    <E2PERSON> <!-- ~100'000 more of those -->
      <PLVAR>01</PLVAR>
....

The XSL is basically:

<xsl:stylesheet
  xmlns:xsl="http://www.w3.org/1999/XSL/Transform" 
  xmlns:asx="http://www.sap.com/abapxml"   
  version="1.0">

  <xsl:output method="text"/>
  <xsl:strip-space elements="*"/>
  
  <xsl:param name="semester" select="1"/>

  <xsl:template match="asx:abap">
    <xsl:apply-templates select="asx:values"/>
  </xsl:template>
  
...

  <xsl:template match="E2PERSON">
    <xsl:variable name="datum">'<xsl:value-of select="REBEG"/>'</xsl:variable>
    <xsl:variable name="zeit_von">'<xsl:value-of select="BEGUZ"/>'</xsl:variable>
    <xsl:variable name="zeit_bis">'<xsl:value-of select="ENDUZ"/>'</xsl:variable>
    <xsl:variable name="veranstaltung" select="number(EVEID)"/>
    <xsl:variable name="person" select="number(RESID)"/>
    <xsl:value-of select="concat('INSERT INTO tmp VALUES
(',$datum,',',$zeit_von,',',$zeit_bis,',',$veranstaltung,',',$person,',',$semester,');')"/>
    <xsl:text>
</xsl:text>
  </xsl:template>

</xsl:stylesheet>

You can get the input xml and the xsl at:
http://elvis-jaeger.mine.nu:5080/~chris/.wohcxsl/