Well, I can give you a short version for versions up to around 4.0.x.  Both modules did about the same thing and really were not that much different at all.  I used both for displaying newsfeeds w/o issues.  However, the latest version of xml/xsl brings some new functionality to the module, which can still be used to display newsfeeds, though.

The beta version of the News Feeds (RSS) module has some enhancements to it, which will set it apart for xml/xsl and more in line with an actual news agregattor.  The actual features I cannot say because I don't have a copy of it, but from reading the project blogs and posts, it sounds like a major change.

For the record, RSS newsfeeds are supported currently by the News Feed (RSS) module with a very basic XSL, which does not include translation of some RSSv2.0 elements.  The default XSL was written to support RSSv0.91, but in some cases will work to translate basic elements, though if a feed includes HTML, it will not render correctly. 

The XML/XSL module is used more generally to represent XML data island in custom formats with custom XSL translation files.

Hope that helps a bit.