A simple XML file can be a substitute for a database, at modest data volumes, say a couple of megabytes, especially when there is little update activity. You can write queries easily enough using XSLT or XQuery. But there's lots of features missing, like fine-grained concurrency and access control.
Michael Kay
http://www.saxonica.com/
Author, XSLT Programmer's Reference and XPath 2.0 Programmer's Reference