Probably a problem of xsltproc. On Windows 2000 with msxsl.exe it's fractions 
of a second:

  @echo off
  cls
  echo Start 
  echo. | time
  msxsl.exe testselect.xml xml2json.xsl -o own.json.txt
  echo Stop
  echo. | time
  echo --------------------------------------------
  echo Start 
  echo. | time
  msxsl.exe testselect.xml xml2json-martynas.xsl -o xml2json-martynas.json.txt
  echo Stop
  echo. | time

Output:

  Start
  The current time is: 22:38:23,54
  Enter the new time:
  Stop
  The current time is: 22:38:23,82
  Enter the new time:
  --------------------------------------------
  Start
  The current time is: 22:38:23,84
  Enter the new time:
  Stop
  The current time is: 22:38:23,91
  Enter the new time:

About the different output: we probably don't want to have breaking changes, 
but I'll leave it open for now.

Benchmarked using a Athlon(tm) XP 1800+ and 256MB RAM running Windows 2000 SP4

Interesting. Thanks for looking into it. I tested a little more, this time 
using PHP. It looks like it's a problem in libxml and/or libxslt.

[colin@vwing debug]$ php5 -a
Interactive shell

php > $xml = new DOMDocument();
php > $xml->load("testselect.xml");
php > $xslt = new XSLTProcessor();
php > $xsl = new DOMDocument();
php > $xsl->load("xml2json.xsl", LIBXML_NOCDATA);
php > $xslt->importStylesheet($xsl);
php > print $xslt->transformToXML($xml);
<output snipped>
php > $xsl = new DOMDocument();
php > $xsl->load("xml2json-martynas.xsl",LIBXML_NOCDATA);
php > $xslt->importStylesheet($xsl);
php > print $xslt->transformToXML($xml);
<output snipped>

I just wall-clocked it this time, and the time was approximately the same.