If you don't need ASP.NET then you can host HTTP directly in an application
fairly easily using .NET 2.0 with http.sys (so Windows 2003 or XP SP2). Here's
a sample in C# that you should be able to morph to do XML. The trick is using
HttpListenerContext.Request and Response to do the heavy lifting for you

using System.IO;
using System.Net;

class Program
{
    static void Main(string[] args)
    {
        HttpListener l = new HttpListener();
        l.Prefixes.Add("http://localhost/HttpListenerApp/");
        l.Start();
        while (true)
        {
            HttpListenerContext ctx = l.GetContext();
            string url = ctx.Request.RawUrl;
            StreamWriter w = new
                          StreamWriter(ctx.Response.OutputStream);
            w.WriteLine("<h2>The URL was {0}</h2>", url);
            w.Close();
        }
    }
}

-Brock
DevelopMentor
http://staff.develop.com/ballen