IMHO XML is not the best and most briliant solution for everything aroud. That is true - you can describe anything you want - even create a really powerfull database, but first you have to convince me :-) to do that :-)
IMHO if I wanted to have an XML database (in my meaning of database) - with unique keys, indexes, etc. I would have a lot of code to write. Sure - I can do that, but is it worth of my time?! I don't think so... I'll use some SQL database then.
Anyway - if we are talking about the simple database (how about DB?!), then you can always use plain-text ASCII files with fields of some format.
Which one is faster - read whole database checking for specified conditions or load everything into memory and then check/select/whatever? I don't know, but I know, that XML is the best commonly used glue to exchange data of any format! It's simple, it's universal, but writing an XML database larger than a few records is a mistake (IMvHO).

Greetz, Tom.