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PowerShell supports XML as a native datatype. To create an XML variable, cast a string to the [xml] type:
$myXml = [xml] @"
<AddressBook>
<Person contactType="Personal">
<Name>Lee</Name>
<Phone type="home">555-1212</Phone>
<Phone type="work">555-1213</Phone>
</Person>
<Person contactType="Business">
<Name>Ariel</Name>
<Phone>555-1234</Phone>
</Person>
</AddressBook>
"@