The iTunes XML file is a mirror of what is stored in the binary database file, but it's not "The" database. If you change the XML, it won't change the real database, and your changes will be overwritten by iTunes. As far as I know, nobody has reverse engineered the DB file format, but you may not need to depending on what you're wanting to do.
(There's more info about this here:-
http://www.marteydodoo.com/2005/06/2...-open-formats/)
If you're on a mac, you can interface programatically with iTunes using AppleScript, but I'm guessing you're probably not. What is it you're actually wanting to do?