Yes, it is possible to embed the XSLT inside of your XML.
XSLT is an XML file, so you would just need to make sure that you put it inside of the document element of your XML file, so that the XML file is still well-formed.
In fact, it is described in the XSLT specification:
Normally an XSLT stylesheet is a complete XML document with the
xsl:stylesheet element as the document element. However, an XSLT
stylesheet may also be embedded in another resource. Two forms of
embedding are possible:
- the XSLT stylesheet may be textually embedded in a non-XML
resource, or
- the xsl:stylesheet element may occur in an XML document other than
as the document element.
To facilitate the second form of embedding, the xsl:stylesheet element
is allowed to have an ID attribute that specifies a unique identifier.
NOTE: In order for such an attribute to be used with the XPath id
function, it must actually be declared in the DTD as being an ID.
The following example shows how the xml-stylesheet processing
instruction [XML Stylesheet] can be used to allow a document to
contain its own stylesheet. The URI reference uses a relative URI with
a fragment identifier to locate the xsl:stylesheet element:
<?xml-stylesheet type="text/xml" href="#style1"?>
<!DOCTYPE doc SYSTEM "doc.dtd">
<doc>
<head>
<xsl:stylesheet id="style1"
version="1.0"
xmlns:xsl="http://www.w3.org/1999/XSL/Transform"
xmlns:fo="http://www.w3.org/1999/XSL/Format">
<xsl:import href="doc.xsl"/>
<xsl:template match="id('foo')">
<fo:block font-weight="bold"><xsl:apply-templates/></fo:block>
</xsl:template>
<xsl:template match="xsl:stylesheet">
<!-- ignore -->
</xsl:template>
</xsl:stylesheet>
</head>
<body>
<para id="foo">
...
</para>
</body>
</doc>
NOTE: A stylesheet that is embedded in the document to which it is to
be applied or that may be included or imported into an stylesheet that
is so embedded typically needs to contain a template rule that
specifies that xsl:stylesheet elements are to be ignored.
Depending on how you plan to leverage it, embedded stylesheets may not be supported. For instance, in IE 6/7/8. There are some workarounds.