string xslMarkup = @"<?xml version='1.0'?>
<xsl:stylesheet xmlns:xsl='http://www.w3.org/1999/XSL/Transform' version='1.0'>
    <xsl:template match='/Parent'>
        <Root>
            <C1>
            <xsl:value-of select='Child1'/>
            </C1>
            <C2>
            <xsl:value-of select='Child2'/>
            </C2>
        </Root>
    </xsl:template>
</xsl:stylesheet>";

XDocument xmlTree = new XDocument(
    new XElement("Parent",
        new XElement("Child1", "Child1 data"),
        new XElement("Child2", "Child2 data")
    )
);

XDocument newTree = new XDocument();
using (XmlWriter writer = newTree.CreateWriter()) {
    // Load the style sheet.
    XslCompiledTransform xslt = new XslCompiledTransform();
    xslt.Load(XmlReader.Create(new StringReader(xslMarkup)));

    // Execute the transform and output the results to a writer.
    xslt.Transform(xmlTree.CreateReader(), writer);
}

Console.WriteLine(newTree);

Dim xslMarkup As XDocument = _ 
    <?xml version='1.0'?>
    <xsl:stylesheet xmlns:xsl='http://www.w3.org/1999/XSL/Transform' version='1.0'>
        <xsl:template match='/Parent'>
            <Root>
                <C1>
                    <xsl:value-of select='Child1'/>
                </C1>
                <C2>
                    <xsl:value-of select='Child2'/>
                </C2>
            </Root>
        </xsl:template>
    </xsl:stylesheet>

Dim xmlTree As XElement = _ 
    <Parent>
        <Child1>Child1 data</Child1>
        <Child2>Child2 data</Child2>
    </Parent>

Dim newTree As XDocument = New XDocument()

Using writer As XmlWriter = newTree.CreateWriter()
    ' Load the style sheet.
    Dim xslt As XslCompiledTransform = _
        New XslCompiledTransform()
    xslt.Load(xslMarkup.CreateReader())

    ' Execute the transform and output the results to a writer.
    xslt.Transform(xmlTree.CreateReader(), writer)
End Using

Console.WriteLine(newTree)