The most important improvement that should go into version 1.1 is the ability to invoke external XSLT stylesheets based on the input files. We might add another element to xml-lit's repertoire, maybe weave-options, which contains attributes that determine what stylesheet ought to be used. A configuration file, environment variable, or command line switch may also be used to determine what XSLT processor to use. This way, xml-lit can automagically weave an input source document into the actual output document. For example, a custom DocBook XSL stylesheet can be written that will format xml-lit's elements in the proper way, using constructions DocBook would understand, and then the main stylesheet would take care of the rest of the formatting, converting the document into HTML of XSL-FO as needed.
Other further improvements to the system would be to make xml-lit more portable, by producing an autoconf script, which would itself be documented here. Since I don't know how to use autoconf yet, editing Makefile is the only way to add system-dependent portability information (such as if expat were in a nonstandard location, et. al.).