Can I store .xsl file's into a .war file?If yes, How?
Does it make any significant performance problems on the application?
You can store pretty much whatever you like in a WAR file and XSL stylesheets work just fine.
You will need to use something like the following line of code to get the XSL stylesheet out of the WAR
java.io.InputStream in = context.getServletContext().getResourceAsStream(XSLpath);
This input stream can then be parsed into a W3C Document object.
It is probably worth caching the stylesheets as Documents so that this parsing is only done once.
Hope this helps