PHP simplexml, on the one hand, to parse; and the code for http://drupal.org/project/node_import (the part where it imports CSV data into nodes aumented with CCK fields).
Maybe you could offer a patch to add XML import for this module.
Another line of investigation might be with the services module, where you would have to unmarshall the XML to a PHP hash in order to take advantage of the node.save service (you might have to write a custom service), here you would pipe stuff in via XMLRPC.