Here's a link to the Wikipedia article about
XML databases. If you read it, you will see that the strategy of storing all your data in a single monster XML document isn't described there. I think that's because (as already mentioned by earlier posters) it really isn't a very good idea at all.
But your task is just to "use XML as database". That doesn't necessarily mean one monster XML document anyway. It could mean something sensible. It could mean a lot of things. Perhaps
you should clarify the requirements before you start designing (or buying).