I have two DSi-XL's and both are used with the EZFlash Vi card. With this card, Software and a Micro SDHC I can run most of the various Games as well as the Homebrew software such as ikuReader and dslibris reader, video and mp3's.
My wife and I desided to replace her aunts DS-Lite with the new and larger screen DSi-XL.
I bought it and while setting it up I did the "software update" via wifi.
On installing a new EZFlash Vi along with the appropriate software the unit would not boot into the card. I swapped out the flash card with my known working flash setup and it still did the same thing (Produced an error on selecting the flash card). Something in the update from Nintendo must have negated the Flash card. The unit worked fine with an Nintendo game cartridge.
I returned the device to the store and purchased another unit at a different store. This time I didn't do the software update and now the device works with all the flash cards and software that I have.
has come out with an FW update for their card but in the mean time I would suggest that you do not apply any Nintendo Updates via it's "Wifi software Update" option until you have had a chance to investigate this more and be careful with the Flash Card FW update as not all are compatible with the DSi-XL. Some are meant for the DSi-3D device.
I am still very impressed with my DSi-XL