Parse XML POST/PUT into params hash

I am creating a RESTful web service and want to allow the user to
supply the POST/PUT representation as either url-encoded key/value
pairs or XML. I have read in several sources that Rails will parse
incoming XML into the params hash. The following data should be
equivalent:

XML: <product><test>Hello</test></product>

url-encoded: product[test]=Hello

They should both result in the hash params = {"product" => {"test" =>
"Hello"}} (+ format, controller and action keys)

But when I do the following curl command:

curl -u name:pass -i -X POST -d "<product><test>Hej</test></product>" http://localhost:3003/product.xml

the params hash looks like this:

{"<dt_order><test>Hej</test></dt_order>"=>""}

Does anyone have any input on why this happens and how to solve it. I
am running 1.2.6 and a 2.0 migration is not possible since the
application is in production.

Thanks in advance

Erik Lindblad