Does anyone know what DFDL is?  (I think that stands
for Data Format Description Language, but I'm not
sure.)

There may be other DFDLs in other areas of endeavor, but
Data Format Description Language is a "DFDL" relevant to XML and XSL.

I was told that I should use it to format documents in
a mixed XML and non-XML repository using XSL-FO.
Does that make sense?

Where can I find our more about DFDL? (And how on
earth to people come up with such unpronounceable
acronyms?)

There will be a tutorial on DFDL (pronounced "daffodil") at
Extreme Markup Languages 2005 in Montreal in August. For
a tutorial description see:
   http://www.mulberrytech.com/Extreme/Tutorials/index.html#Rose

and for information about Extreme see:
   http://www.extrememarkup.com/