Is it possible with XSLT?

Yes, it is possible. Use the following XSL file.

<?xml version="1.0"?>
<xsl:stylesheet xmlns:xsl="http://www.w3.org/1999/XSL/Transform" version="1.0">
  <xsl:output method="html" indent="yes"/>
  <xsl:variable name="my-user-list" select="//user" />
  <xsl:variable name="my-user-list2" select="//user[not(./@firstname=following::user/@firstname)]" />
  <xsl:template match="/">
    <users>
    <xsl:for-each select="$my-user-list2">
      <xsl:variable name="my-user" select="." />
        <user>
          <username>
            <first>
            <xsl:value-of select="$my-user/@firstname" />
            </first>
            <last>
            <xsl:value-of select="$my-user/@lastname" />
            </last>
            <articles>
            <xsl:for-each select="$my-user-list">
              <xsl:variable name="my-user2" select="." />
              <xsl:if test='//*[$my-user/@firstname = $my-user2/@firstname]'>  
              <article>
                <xsl:value-of select="$my-user2/@article" />
              </article>
              </xsl:if>  
            </xsl:for-each>
            </articles>
          </username>
        </user>
    </xsl:for-each>
    </users>
  </xsl:template>
</xsl:stylesheet>

<users>
    <user>
        <username>
            <first>Jack</first>
            <last>Jill</last>
            <articles>
                <article>Three</article>
            </articles>
        </username>
    </user>
    <user>
        <username>
            <first>John</first>
            <last>Joe</last>
            <articles>
                <article>One</article>
                <article>Two</article>
            </articles>
        </username>
    </user>
</users>