Define 'XML rules'. XML is just a descriptive way of storing data - you can define your own 'schema' that means the XML can be interpreted as a series of rules for processing text, but how you do that is up to you - I'm not aware of any standard method.
You would then need something that understood your XML to process it, and the input to produce the output.
If you are using XSLT 2.0 then you can write XSLT to process text, usually using the unparsed-text() function to read the incoming text, but you either end up with a number of regular expression instructions, or loads of substring function calls etc.
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