Libxml is an extremely fast, highly correct implementation of a number of XML-related specifications.
XML and XML Namespaces
Schema support (in progress)
Relax NG
Used in a number of applications that require heavy XML processing: Gnumeric, Yelp, libbonobo
Libxslt is an XSLT processor built upon libxml. Correctness and speed are the design goals and are well met.
Active mailing list, good documentation (from beginner-level tutorial up to API documentation), very readable code.