I'm confused by jsTree's XML module. I'm using 1.0rc2. Specifically, jsTree converts XML to an HTML list-based tree using XSLT. I couldn't get my XML to render so checked out the source code; looks like the XSL is hard-coded into jsTree's code and one particular line means it will only work if you're root's child elements are called item;
<xsl:for-each select="$node/item">'
Are you meant to update the source code with your own XSLT?