In my experience parsing xml files with REXML was much slower than reading from MySQL.
I had a storefront that read product data from XML that was dumped from a legacy POS system. Page loads were SLOW. I wound up writing an update script to sync the XML files with a MySQL table and it became much faster. Not to mention the ease of use for CRUD that comes with ActiveRecord.
That said, I could've probably just cached the XML (as you could too) but in my case I wasn't writing to XML, just reading. Also creating a model that houses the logic for CRUD/returning attributes, would probably make you much happier, and your app more rails like. that way if you ever decide to switch to db later, it will be much easier. But if you're building from scratch, I'd just go with MySQL (or other DB).
