A URI can't be a HASH reference at /System/Library/Perl/Extras/5.8.8/LWP/Simple.pm line 113

Is there some way that I can ignore <icon-link xsi:nil="true"/>

The error message points you to a possible way around the problem: test if ->[0] is a hashref, and if so, skip to the next entry, or skip that case entirely, or whatever you'd consider an appropriate workaround in case of missing data.

The thing is that XML::Simple is creating an extra hashref as soon as the XML tag has an attribute (such as <icon-link foo="bar" ...).  You can always use Data::Dumper to figure out such things yourself. Consider the following:

#!/usr/bin/perl

use XML::Simple;
use Data::Dumper;

my $xml_parser = XML::Simple->new();

for my $icon_link_xml (
    '<icon-link>http://www.nws.noaa.gov/weather/images/fcicons/sct.jpg
+</icon-link>',
    '<icon-link xsi:nil="true"/>',
    '<icon-link foo="bar"/>',
    '<icon-link foo="bar">http://www.nws.noaa.gov/weather/images/fcico
+ns/sct.jpg</icon-link>',
    ) {

    my $xml = <<"EOXML";
<?xml version='1.0' ?>
<dwml xmlns:xsi="http://www.w3.org/2001/XMLSchema-instance">
  <data>
    <parameters>
      <conditions-icon>
        <name>Conditions Icons</name>
        $icon_link_xml
        <icon-link>http://www.nws.noaa.gov/weather/images/fcicons/nra3
+0.jpg</icon-link>
      </conditions-icon>
    </parameters>
  </data>
</dwml>
EOXML

    # print "$xml\n";
    
    my $data = $xml_parser->XMLin($xml);
    
    # print Dumper $data;

    my $icon_link = $data->{'data'}{'parameters'}{'conditions-icon'}{'
+icon-link'};
    
    print Dumper $icon_link;

    # use the next entry, for example
    my $idx = ref($icon_link->[0]) eq "HASH" ? 1 : 0;
    my $weatherIconURL = $icon_link->[$idx];

    # or skip entirely
    #next if ref($icon_link->[0]) eq "HASH";

    print "=> \$weatherIconURL: $weatherIconURL\n\n";
}

__END__
$VAR1 = [
          'http://www.nws.noaa.gov/weather/images/fcicons/sct.jpg',
          'http://www.nws.noaa.gov/weather/images/fcicons/nra30.jpg'
        ];
=> $weatherIconURL: http://www.nws.noaa.gov/weather/images/fcicons/sct
+.jpg

$VAR1 = [
          {
            'xsi:nil' => 'true'
          },
          'http://www.nws.noaa.gov/weather/images/fcicons/nra30.jpg'
        ];
=> $weatherIconURL: http://www.nws.noaa.gov/weather/images/fcicons/nra
+30.jpg

$VAR1 = [
          {
            'foo' => 'bar'
          },
          'http://www.nws.noaa.gov/weather/images/fcicons/nra30.jpg'
        ];
=> $weatherIconURL: http://www.nws.noaa.gov/weather/images/fcicons/nra
+30.jpg

$VAR1 = [
          {
            'content' => 'http://www.nws.noaa.gov/weather/images/fcico
+ns/sct.jpg',
            'foo' => 'bar'
          },
          'http://www.nws.noaa.gov/weather/images/fcicons/nra30.jpg'
        ];
=> $weatherIconURL: http://www.nws.noaa.gov/weather/images/fcicons/nra
+30.jpg
[download]

Alternatively, you could set ForceContent => 1, and then use

    $weatherIconURL = $data->{'data'}{'parameters'}{'conditions-icon'}
+{'icon-link'}[0]{content};
[download]

In that case, the URL would simply be undefined (for <icon-link xsi:nil="true"/>) — which you'd have to check for as well, of course, to prevent further steps from erroring out when trying to fetch it...