We use XSLT extensively for things like documentation, and making some complex configuration settings user-serviceable.
For documentation, we use a lot of DocBook, which is an XML-based format. This lets us store and manage our documentation with all of our source code, since the files are plain text. With XSLT, we can easily build our own documentation formats, allowing us to both autogenerate the content in a generic way, and make the content more readable. For example, when we publish release notes, we can create XML that looks something like:
<ReleaseNotes>
<FixedBugs>
<Bug id="123" component="Admin">Error when clicking the Foo button</Bug>
<Bug id="125" component="Core">Crash at startup when configuration is missing</Bug>
<Bug id="127" component="Admin">Error when clicking the Bar button</Bug>
</FixedBugs>
</ReleaseNotes>
And then using XSLT (which transforms the above to DocBook) we end up with nice release notes (PDF or HTML usually) where bug IDs are automatically linked to our bug tracker, bugs are grouped by component, and the format of everything is perfectly consistent. And the above XML can be generated automatically by querying our bug tracker for what has changed between versions.
The other place where we have found XSLT to be useful is actually in our core product. Sometimes when interfacing with third-party systems we need to somehow process data in a complex HTML page. Parsing HTML is ugly, so we feed the data through something like TagSoup (which generates proper SAX XML events, essentially letting us deal with the HTML as if it were properly written XML) and then we can run some XSLT against it, to turn the data into a "known stable" format that we can actually work with. By separating out that transformation into an XSLT file, that means that if and when the HTML format changes, the application itself does not need to be upgraded, instead the end-user can just edit the XSLT file themselves, or we can e-mail them an updated XSLT file without the entire system needing to be upgraded.
I would say that for web projects, there are better ways to handle the view side than XSLT today, but as a technology there are definitely uses for XSLT. It's not the easiest language in the world to use, but it is definitely not dead, and from my perspective still has lots of good uses.