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It works and I used this method for two different people who want to send out emails in HTML format.
If you find yourself in this situation, make the XML simple and if possible, keep the attributes to a minimum. Try to make it all elements. Then, tell your client that it is simply a matter of element on and element off: <XML element>code</XML element>
Of course, you will have to code the XSL to make the HTML.
That's just one example of an xml interface. A good example would be UPS's xml interface that allows real time shipping quotes that can be seamlessly integrated within your site.
Mac