The xslt_process() command is expecting a uri relative to the path of php.exe and not that of the script calling it.

Using an XML file and an XSL with the following script:

// script location: c:/apache/htdocs/pathto/test.php
<?php
 $xsltproc = xslt_create();
 $html = xslt_process($xsltproc, 'test.xml', 'test.xsl');
 // some error checking left out for simplicity
 echo $html;
?>

I get the following error:
XSLT processing error: cannot open file 'c:/apache/php/test.xsl'

I read the archives, and saw that this bug was previously reported for 4.3.0 and then closed as fixed in CVS.  However 4.3.2 RC1 still exhibits this behaviour.  This was then re-tagged as a documentation error, however this behaviour is not right, as developers should not have access to the path with php.exe.

Some possible fixes which were recommended were to override the base path with xslt_set_base(), however this would make the scripts machine specific and reduce portability.