Pretty printing XML with javascript

From the text of the question I get the impression that a string result is expected, as opposed to an HTML-formatted result.

If this is so, the simplest way to achieve this is to process the XML document with the identity transformation and with an <xsl:output indent="yes"/> instruction:

<xsl:stylesheet version="1.0"
 xmlns:xsl="http://www.w3.org/1999/XSL/Transform">
 <xsl:output omit-xml-declaration="yes" indent="yes"/>

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

When applying this transformation on the provided XML document:

<root><node/></root>

most XSLT processors (.NET XslCompiledTransform, Saxon 6.5.4 and Saxon 9.0.0.2, AltovaXML) produce the wanted result:

<root>
  <node />
</root>

This can be done using native javascript tools, without 3rd party libs, extending the @Dimitre Novatchev's answer:

var prettifyXml = function(sourceXml)
{
    var xmlDoc = new DOMParser().parseFromString(sourceXml, 'application/xml');
    var xsltDoc = new DOMParser().parseFromString([
        // describes how we want to modify the XML - indent everything
        '<xsl:stylesheet xmlns:xsl="http://www.w3.org/1999/XSL/Transform">',
        '  <xsl:strip-space elements="*"/>',
        '  <xsl:template match="para[content-style][not(text())]">', // change to just text() to strip space in text nodes
        '    <xsl:value-of select="normalize-space(.)"/>',
        '  </xsl:template>',
        '  <xsl:template match="node()|@*">',
        '    <xsl:copy><xsl:apply-templates select="node()|@*"/></xsl:copy>',
        '  </xsl:template>',
        '  <xsl:output indent="yes"/>',
        '</xsl:stylesheet>',
    ].join('\n'), 'application/xml');

    var xsltProcessor = new XSLTProcessor();    
    xsltProcessor.importStylesheet(xsltDoc);
    var resultDoc = xsltProcessor.transformToDocument(xmlDoc);
    var resultXml = new XMLSerializer().serializeToString(resultDoc);
    return resultXml;
};

console.log(prettifyXml('<root><node/></root>'));

Outputs:

<root>
  <node/>
</root>

JSFiddle

Note, as pointed out by @jat255, pretty printing with <xsl:output indent="yes"/> is not supported by firefox. It only seems to work in chrome, opera and probably the rest webkit-based browsers.

Found this thread when I had a similar requirement but I simplified OP's code as follows:

function formatXml(xml, tab) { // tab = optional indent value, default is tab (\t)
    var formatted = '', indent= '';
    tab = tab || '\t';
    xml.split(/>\s*</).forEach(function(node) {
        if (node.match( /^\/\w/ )) indent = indent.substring(tab.length); // decrease indent by one 'tab'
        formatted += indent + '<' + node + '>\r\n';
        if (node.match( /^<?\w[^>]*[^\/]$/ )) indent += tab;              // increase indent
    });
    return formatted.substring(1, formatted.length-3);
}

works for me!