Howard Katz recently announced XQEngine on the [xml-dev] list.
XQEngine is a compact (roughly 250K) embeddable component written in Java. It's not a standalone application and requires a reasonable amount of Java programming skill to use. It has a straightforward programming interface that makes that fairly easy to do. It's single-threaded and should work well as a personal productivity tool on a single desktop, as part of a CD-based application, or on a server with low to moderate traffic. (Making the engine thread-capable is not overly difficult and remains a future project.)
