Source Reducer

I have a source xml which is 19MB +  I'm running the following "source
reducer" template against it using the MSXML4 parser, however it is
slow (has been running well over 2 min. now).  Any suggestions on how
to optimize this source reducer template?  Also, how does the ancestor
match below work, what does it do exactly?

<xsl:strip-space elements="*"/>

 <xsl:template match="node()|@*">
   <xsl:copy>
     <xsl:apply-templates select="node()|@*"/>
   </xsl:copy>
 </xsl:template>

 <xsl:template match="/*/*[position() > 20]"/>

 <xsl:template match="*[ancestor::*[3]]"/>