As you can see when I use the plugins it wraps some parts of my MS xml files. I know MS doesn't do them right according to standards. You can imagine trying to do an installation of Vista/Windows Seven when it hits that you get an ugly error.
This is what tidy (the XML formatting plug-in EDPro uses) does, at least with the options we use. You may want to play with it's command line switches (Options | Plug-ins) but I believe that this is how the -xml switch behaves.