...simple - just don't use script in XSLT unless you really really really have to. Especially on the server side - XSLT script and ASP.NET should never meet. Use XSLT extension objects instead. As simple as it is.
Amen, f'real. When XSLT 1.1 first emerged the first thing that jumped out from the spec and punched me in the face was the embedded script facility. I made a fuss about it:
In general, I think the re-introduction of xml:script is execrable. XSLT 1.0 had perhaps the most elegant extension model possible, and xsl:script ruins this by destroying the opacity of extensions to XSLT processors. Language bindings may make sense in the realm of CORBA or DOM, where the actual expression of the program is done in the bound language, but XSLT is XSLT, and introducing the need for language bindings only reduces general interoperability while giving a small boost to interoperability between small axes of implementations.
I even worked with some like-minded folk to put together a petition. I have no idea whether that was instrumental in any way, but soon enough XSL 1.1 was dead and replaced with XSLT 2.0, which was built on XPath 2.0 and thus had other big problems, but at least no xsl:script.
xsl:script does live on in some implementations, and notably MSXML, as you can see from Oleg's post. You can also see some of the problems. XSLT and many more general-purpose languages make for uncomfortable fit and it can be hard for platform developers and users make things work smoothly and reliably. More important than memory leaks, script-in-xsl is a huge leak of XSLT's neat abstraction, and I think this makes XSLT much less effective. For one thing users are tempted to take XSLT to places where it does not fit. XSLT is not a general-purpose language. At the same time users tend not to learn good XSLT design and techniques because they scripting becomes an escape hatch. So an script user in XSLT generally cripples the language at the same time he is over-using it. An unfortunate combination indeed.
Oleg advocates XSLT extensions rather than scripting, which is correct, but I do want to mention that once you get used to writing extensions, it can be easy to slip into habits as bad as scripting. I've never been tempted to implement a Python scripting extension in 4XSLT, which would be easy, but that didn't stop me from going through a phase of overusing extensions. I think I've fully recovered, and the usage pattern I definitely recommend is to write the general-purpose code in a general-purpose language (Python, C#, whatever) and then call XSLT for the special and narrow purpose of transforming XML, usually for the last mile of presentation. It seems obvious, and yet it's a lesson that seems to require constant repetition.