Cap,

Voltage conditioning is not done by the transformer itself. There are
several additional devices to do filtering, like RLC filters and
semiconductor switches that conduct "spikes" to the ground filtering
the AC voltage etc. Problem of voltage stabilization is even more
complicated (in modern UPS it is usually based on digital synthesis)
and is not solved by use of a transformer alone. Moreover, the
transformer has its own inductance, and if not equipped with
appriopriate filtering-conditioning circuit, it could even make
things worse, expecially in case of spikes generated by sparkling
somewhere in the "dirty" supply network.

Regards,

Tomasz Durakiewicz