Hi, I've read your question and may have a couple of answers for you. Typically if you have an XML file, you will have all of your site's content in it. you can then you data islands within HTML for display of the content. Secondly you can link to an xsl stylesheet from your XML file and whenever the file is requested the XSL will transform the XML into HTML on the client side. I don't recommend doing that though, as I have tried it before here at work and at least half of the computers I tested on wouldn't or couldn't handle the transformations. Thirdly, (boy, i'm a little long winded. sorry about that...) you can use a server side transformation of your data and send the HTML dynamically to the client.
Questions, comments, ideas anyone?