Short Story:

This is a bug in XML::SAX. Install XML::SAX::Expat and then try the XML::Simple install again

Longer Story:

XML::Simple delegates the parsing of XML to either XML::SAX or XML::Parser. SAX will be used if it is installed, otherwise XML::Parser is the fallback. SAX is cool because it allows you to plug in different parser modules and allows you to assemble pipelines of filter modules (XML::Simple can be used there). Unfortunately the 'PurePerl' parser included in the SAX distribution has bugs (for which I have submitted patches). But even if it wasn't buggy, you'd want to install a faster (C-based) parser module anyway. XML::SAX::Expat is a good choice.