XSD (XML Schema Definition), a recommendation of the World Wide Web Consortium (W3C), specifies how to formally describe the elements in an Extensible Markup Language XML document. This description can be used to verify that each item of content in a document adheres to the description of the element in which the content is to be placed.
Schema represents relation between Attributes and Elements in XML Object.
XSLT (XSL Transformations):- This is mainly used to style the XML. it transforms one XML doc to another xml doc ,like XHTML.
It has many use in SharePoint like :
1)you can give a form to your XML file
2)create different charts in SharePoints etc