1. Create a view with the type "XML".
2. Configure the query settings:
   • XML file: a relative or absolute path to the XML file.
   • Row XPath: XPath for rows (from which come fields, filters, etc).
3. Add fields -- the XPath selector is relative to the row
4. Add filters -- the XPath selector is relative to the row

There is also a screencast walking through a demonstration of XML Views.