Shil, I am looking at the Output area on your screenshot there. Is there any way you can have a button there that auto-sets the format into a "pretty format"?
Check out The Moremotion XML Editor and you can see what I mean.
http://www.moremotion.com/downloads/index.html
Its free, and that is what I use.
If you edit the tag:
<?xml version="1.0" encoding="us-ascii"?>
to
<?xml version="1.0"?>
It would be able to reformat the way it lists. I have yet to see any need for the encoding part.