sorry but we have no support for using xml for data storage and it would be a very tall order to implement it.
We also do not have a web service api for much mojoPortal functionality other than an authentication and role services that could be used in Silverlight or WPF.
Having a web app that talks directly to the database is much faster than one that talks to web services with server side code making secondary web requests. Even if there were a comprehensive web service api it would still need a connection to a database.
If your requirement is for a web service based solution I think you should look elsewhere. If you just want to eliminate the MS SQL database you could use our package for SQL CE which is a file based database and requires no server software, it performs ok for low to medium traffic sites but is not as robust as MS SQL Server.
Hope that helps,
Joe