Try this
XmlDocument doc = new XmlDocument();
doc.Load("filename.xml");
XmlNodeList nodelist = doc.SelectNodes("employee");
if (nodelist[0].Attributes["Id"].Value == "5")
{
nodelist[0].Attributes["ChatStatus"].Value = "1";
doc.Save("filename.xml");
}
This will update the first node,if you want you can loop through the nodes.