"You need the XSLT library installed in PHP to open this Blackboard file"
Perhaps the php_xsl.dll that comes as part of the PHP distribution is what is being looked for. That being the case, then you need to load it as an extension in the PHP.ini file; i.e.
After making this change, you will have to restart your server.
This information relates to Windows servers, but I doubt if this is much of a difference for 'nix servers.