You'd need to encode the image into characters, maybe using something like base64. Then the image becomes regular ASCII that can be stuffed into an XML document. You couldn't do anything else with the image until the encoding has been reversed, though. Before doing this I'd consider at length if there isn't a better way to store the image (maybe as a file, with the file path in the XML).
Have a look on this site http://www.loc.gov/standards/mix/
That looks like it's just about image metadata, not actual image data - am I missing something?