Microsoft, as mentioned above, has a bad habit of using the word "Unicode" when they really mean UTF-16 little endian, and thus have tricked many developers into creating XML documents that look like the one you sent, with the invalid character encoding name. With XML::LibXML, this means you can't use parse_file because you have to remove the faulty declaration first. Here's a snippet that does it (assuming $xmlfile contains the filename):

my $parser = XML::LibXML->new();
open my $in, '<:encoding(UTF-16)', $xmlfile or die $!;
my $xmltext = do { local $/;  <$in> };
close $in;
$xmltext =~ s/encoding="Unicode"//i;
my $doc = $parser->parse_string($xmltext) or die "Could not process XM
+L file $xmlfile";
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My own Windows app (the one mentioned on my home node) does precisely this.