I don't much about XML document performance, but maybe you are not using the best module? I found XML-LibXML which had an example like this:

  use XML::LibXML;
  # load
  open my $fh, '<', 'file.xml';
  binmode $fh; # drop all PerlIO layers possibly created by a use open
+ pragma
  $doc = XML::LibXML->load_xml(IO => $fh);

  # save
  open my $out, '>', 'out.xml';
  binmode $out; # as above
  $doc->toFH($out);
  # or
  print {$out} $doc->toString();
[download]

If this thing works in binary mode on the file handle and has a C XS implementation in Perl, it will be pretty fast.

XML::Simple says:

The use of this module in new code is discouraged. Other modules are available which provide more straightforward and consistent interfaces. In particular, XML::LibXML is highly recommended and XML::Twig is an excellent alternative.

Update: see following post from Corion++