> In this case, am I correct in assuming that xml-to-xml conversion is 
> neccessary?

Absolutely!
> 
> I'm having difficulties finding any resources for this area. 
> I understand 
> XML and XSL concepts, but there seems to be a grey area over 
> XML to XML conversion.

No, it's not a grey area. XML-to-XML conversion is a key application of
XSLT. (There are two important subdivisions: where the vocabulary of the
target document is the same as the source document, and where it is
different.)

It might be true that XML-to-HTML conversion accounts for 75% of the usage
of XSLT, but it's best regarded as a special case.

> 
> I'd be most grateful if anyone good point me in the directions of any 
> articles or books that may be of use.
> 

Most decent XSLT books should have a range of XML-to-XML examples. My "XSLT
Programmer's Reference" (any edition) discusses the concepts in Chapter 1,
and has many examples scattered through the book.

Michael Kay
http://www.saxonica.com/