Actually your best bet might be not to use XML::Parser at all, but to use a higher level (read easier-to-use) module.

If your data is as simple as what you describe and the file is small enough that you can load it all in memory, which is likely, you can use XML::Simple:

#!/bin/perl -w
use strict;

use XML::Simple;                # depends on XML::Parser
use Data::Denter;               # just to check what's read in by

my $data= XMLin( \*DATA); # read the data, you would use "./$file"
print Denter( $data), "\n";     # just checking

__DATA__
<users>
  <user>
    <name>Joshua Kruck</name><username>krujos</username><password>jonn
+y5</password>
  </user>
  <user>
    <name>John Doe</name><username>jdoe</username><password>jane</pass
+word>
  </user>
</users>
[download]

Will give you the following output:

%    user => %
        John Doe => %
            password => jane
            username => jdoe
        Joshua Kruck => %
            password => jonny5
            username => krujos
[download]

Read the docs as for example you might want the keys to the hash to be the username and not the name (use keyattr => 'username' when you call XMLin).