I don't know, if this helps, but there are similiar tools available but instead of xml they use some form of markdown.
First there is
Pandoc. This is mainly a converter.
And then there is
AsciiDoc, which is an advanced markdown syntax. After a quick look, this could be very interesting. But it is (or looks) not that simple. And as it is markdown, there is no word processor involved, but simple editors. So no WYSIWYG, no GUI specialized for the task etc. On first sight, it seems to suffer on something that unfortunatly affects a lot of open/free Software: It is not user friendly. All you get is a command line tool. To convert to for example pdf, you have to manually install Latex, DocBook etc. Alone the setup is not that easy. And no GUI or a customized Notepad App to write is another difficulty. Not to speak about a revision system, spell-checking, comments etc. that a word processor provides.
But maybe you could work with something this projects do.