As for 'custom element tags' - I'm not sure what do you mean.
I've managed to add additional parameters that could be set up via widget - in my case I wanted to add parameters 'width' and 'height', that could be used in templates to define size of objects (YouTube videos) displayed in widget.
It's not an easy way to describe 'how to do this' - in short, I had to add several lines in php5.php file of Advanced RSS plugin.
I'm sure that in the same way one could pass some CSS variables, CSS file, or other parameters usable in XLST template.
Another thing: I've noticed that adding just another XLST template (adding file in plugin directory) is not enough - I had to add information about it in two places in php5.php file, to get it loaded. One is a list of templates loaded via plugin, second is a list of template description that are shown in Advanced RSS configuration page.
And yet another thing - I had to deactivate/activate plugin to 'refresh' template list.
Maybe there's a simpler way to do this.