Hi,
Across BL and DAL you might opt for dataset/xml whatever is as per your requirement.
1. When you have data stored in XML file then you can get the data from xml file as xml. So you have the objective of passing this xml data to database stored procedure.
In database SQL Server 2005 onwards there is datatype called "xml". You can pass the xml data from DAL to stored procedure as xml data. Inside stored procedure how you can extract data is found here,
http://weblogs.asp.net/jgalloway/archive/2007/02/16/passing-lists-to-sql-server-2005-with-xml-parameters.aspx
The above article is very nice and I am sure would be very much helpful.
Another one thing, people sometime passes xml data as a string from data access to stored procedure. But problem is their is restriction of max data length when you pass xml data is varchar. Hence it is better if you directly use type xml instead of varchar for sending data to stored procedure from DAL.
Let me know if the post is helpfull.