I saw this on the dev list and ran into the same issue and wanted to post the
fix here so that it could be done in the jackrabbit maven build files.
Junit tests with jackrabbit fail with a Provider
org.apache.xalan.processor.TransformerFactoryImpl not found error
This only happens when
a) repo does not exist. Same test works if repo exists on filesystem
b) invoked via junit/maven. junit via eclipse works fine
Add the following to you maven pom file:
<dependency>
<groupId>xalan</groupId>
<artifactId>xalan</artifactId>
<version>2.7.0</version>
<scope>test</scope>
</dependency>