You are supposed to have two different XSLT stylesheets for differnt output aren't you? That should be similar to using two different templates.
This is true, except that building XML/XSLT templates has, so far, proven to be more difficult than building pages using a templating system, as measured by its high WTF factor, and poor tool support.
HTML and RSS
I think this is a different scenario than most web services find themselves in. They usually have a vast number of HTML pages, and a small number of RSS documents. But if your dominant medium is RSS, then it certainly makes sense to use XSL to let them be viewable in an HTML browser. But I don't know how this would support any concept of page flow, and so is probably an exception.
FWIW, I think Karl's design for ACS4 templating was pretty close to ideal.
But that's an armchair analysis, not one from experience. For those who have worked with it, what was it like?
