Merge 2 XML files based on attribute values using XSLT?

This should do it:

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

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

  <xsl:template match="root">
    <xsl:copy>
      <xsl:apply-templates select="@* | node()" />
      <xsl:apply-templates
        select="document('file2.xml')
              /config/state[@version = current()/../@version]
                     /root[@value = current()/@value and
                           @group = current()/@group]/*" />
    </xsl:copy>
  </xsl:template>

</xsl:stylesheet>

When run with your file1.xml example as the main input, this produces:

<config>
  <state version="10">
    <root value="100" group="5">
      <leaf number="2" />
      <leaf number="6" />
    </root>
    <root value="101" group="6">
      <leaf number="3" />
      <leaf number="4" />
    </root>
  </state>
</config>