Strange... It works just fine for me. But I have some comments:

• You should use while(<>), not for(<>). The latter reads the whole file into memory first, which you say (rightly) that you don't want to do.
• Are you really wanting to process an XML file? If so, then this is a pretty bad way to do it. XML::Simple and several others are readily available, and will Do The Right Thing without you having to think twice about it.

use XML::Simple;
my $ds = XMLin "664168.xml";

use Data::Dumper;
print Dumper $ds;
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