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In the free zone I'd recommend Notepad++. It's not an XML editor per se, but it does a nice job of colorizing and highlighting XML, and comes with a bunch of plugins for checking well-formedness, finding nodes, and more.
moderator's note: please do not evangelize commercial products. But free ones are OK to mention by name as long as they're actually 100% free.
Well, you may edit editor name, in my previous post; I'd tried but unable to edit.