XQUERY versus XSLT; which one is best?

SOA Suite clearly supports XSLT better where as OSB supports both XQuery and XSLT.

But question arises when to go for XSLT and when for XQuery ...!!

So the best answer is

If you have LARGE Messages and transformations on every element, XSLT might perform better because at runtime whole XML document is loaded in memory when using XSLT while XQuery loads the objects in memory depending on each statement.

But nn the other hand if doing a transformation on a large object but using only a FEW Elements out of BIG XML it would make sense to use XQuery instead of XSLT.

One factor in favor of XSLT may be that being an XML you can generate scripts to dynamically generate XSLTs, but it would be much tougher to generate an XQuery dynamically, although use cases for this scenario are very few (usually migration utilities etc).