First, do you really want to use XML? ;-) On one hand, it's great in that it's entirely cross-platform (and here I refer to languages more than hardware). On the other hand, it's overly verbose, and uses up way too much memory.

If you're doing this in perl anyway, YAML may be a better/smaller/faster choice. It'll mostly limit you to perl - should you want to reimplement in another language, you'll need to reimplement something (either YAML in that other language, or convert everything to XML for perl).

As for your stumbling block ... yes, that is always something that has confused me, too. Especially when <spell name="sleep>...</spell> is so much shorter than <spell><name>sleep</name>...</spell>. Good luck :-)