Answer
You could use both. However, the SLAX syntax is signficantly easier to develop scripts with. When Junos processes SLAX, it converts it first to XSLT. It is possible, and sometimes necessary, to embed native XSLT into SLAX. For example, if one needed to create a function (not a template) for your automation, you would currently need to use the <func:function> XSLT construct.
Improvements and advances in the SLAX syntax are in progress.