First one important point: you don't HAVE to use XML.

Why would you use it, and is it really that much of an improvement over other formats:

• it's a text format, meaning that you can always check what's in your config file with less and edit it with vi, but most other formats are also text, so there is little gain here,
• there are tools for it, so you don't have to write your own parser, but there are Perl modules for a lot of other formats, see Persistence for options? for exemple,
• it is a powerful standard, so you get a lot more than you realize when you start using it, like entities (your configuration could be split into several physical files, that do not even have to be on the same machine), stylesheets (so you can display the file in a browser easily)...
• one of the big wins I think is that it is very easy to write code that will survive changes in the format of the config file, say you add a field, your existing code will much likely ignore it and keep on working; you can get this with other formats but it might be a little harder to do (and I will not argue with anyone that will try to prove me that CSV can match this ;--)
• XML is quite flexible, so "multiple fields" could be properly tagged without you having to write a more complex parser:
  something like this will still be easy to parse:

  <config>
    <server name="server1">
      <application name="app1">
        <params>
          <!-- note the 2 params -->
          <param>p1</param>
          <param>p2</param>
        </params>
      </application>
    </server>
  </config>
  [download]

• finally it is a standard, it will make your boss feel good, and it is a safe way to get aquainted with XML, instead of having to tackle it on a bigger and more risky project.

A couple of things that can be annoying though:

• The content of the fields need to be proper XML: they can't include '<' or '&' for example. Most modules will deal with this transparently... provided you use them for creating the file!
• encodings might become an issue if you use accented characters, which does not seem likely in your case, but you never know... maybe the German branch will want error messages in German some day or something like that...

Finally, as others have suggested, XML::Simple is probably the ideal module for you. Write your config file, load it using XMLin, dump it ( or use the debugger) to figure out what's in the data structure, and you should be ok. Read the docs though, as, to quote them "in fact as each release of XML::Simple adds more options, the module's claim to the name 'Simple' becomes more tenuous".