Mario Klingemann isn't a huge fan of XML because of its poor data-to-structure ratio that causes bloated data files. So he's come up a with a solution for using XML in his Flash applications while cutting down on the overhead:
I wrote a server-side PHP script which can reduce XML filesizes a lot without changing the way that you access the data. It achieves this by creating a compressed swf out of the xml file. Instead of loadXML you use loadMovie to get the data. After the loading has finished you'll find an XML-object with a name of your choice inside. And instead of 32500 bytes it's merely 7400 bytes small.
More on his xml2swf script here. Download it here.
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