The way candidates answer this question may provide insight into their view of XML data. For those who view XML primarily as a way to denote structure for text files, a common answer is to build a full-text search and handle the data similarly to the way Internet portals handle HTML pages. Others consider XML as a standard way of transferring structured data between disparate systems. These candidates often describe some scheme of importing XML into a relational or object database and relying on the database's engine for searching. Lastly, candidates that have worked with vendors specializing in this area often say that the best way the handle this situation is to use a third party software package optimized for XML data.
Obviously, some important areas of XML technologies were not included in this list -- namespaces, XPointer, XLink, and so on -- and should be added to the interviewer's set of questions if applicable to the particular position that the candidate is applying for. However, these questions in conjunction with others to assess soft skills (communication skills, ability to work on teams, leadership ability, etc.) will help determine how well candidates understand the fundamental principles of XML.