I've added a proposal to add a SAX API support to Daffodil. https://cwiki.apache.org/confluence/display/DAFFODIL/Proposal%3A+SAX+API
Many libraries and applications already support SAX, so this should provide a means for more seamless integration into different toolsuites, opening up the places where Daffodil could be easily integrated. SAX is also generally viewed as having a lower memory overhead, though this does not attempt to solve the memory issues related to Daffodil and the internal infoset representation. This essentially just adds a SAX compatible API around our existing API. Other changes are needed to reduce our memory overhead and truly support a streaming model. - Steve