The W3C describes how you can embed a stylesheet within an XML file and then refer to it, allowing the document to transform itself. Unfortunately IE and Firefox don't seem to support this, but I did find a description of how to embed data within a stylesheet, giving similar effect. This doesn't solve my current problem (more about that below), but it does make it much easier to show examples of stylesheets. In particular, here is the authorities stylesheet described earlier with an embedded SRU searchRetrieve response (looks best in Firefox).
Haven't solved this yet, although if you look at the example's source I have managed to embed the CSS stylesheet within the XSLT.