Well, you're past my personal high water mark. I have a lot of daily XML files that are ~50 meg. that I generate with XML::Writer. I've never experienced the problem you describe.

Could it be an output buffering/flushing issue? Is the reader reading the generated XML while the writer is still running? If so it may just be a matter of closing the output file or setting writes to be unbuffered.

My next guess would be that you've hit an OS file size limit. But 400 meg. seems too low for that.