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"I want to create all documentation in XML - am not sure what tool to use [...]."
How did you come to the conclusion that you need XML?
I would suggest a three-step approach to a working solution for your documentation problems:
1) Try to evaluate your requirements honestly and as precise as possible. (Nice exercise to get to know your own processes explicitly, btw.)
2) Assign priorities to your requirements (basic, important, nice to have).
3) Compare the tools on the market to see how each meets your requirements.
If your still come to the conclusion afterwards that you need an XML-based solution, you have based this conclusion on pretty solid facts. From the little facts I can draw from your message, you seem to have looked at tools first and at your requirements later. This is a very widespread phenomenon, so you're in good company. :)
Maybe you come to the conclusion that your problem can be pretty well solved with FrameMaker and its XML capabilities. Maybe not. But take a look at your requirements first before making a tool decision. It will save you lots of trouble later.
Also bear in mind that, while being an extraordinarily powerful data format, XML is still basically a data format. It does not solve any problems by itself, just like SQL or C++. (Please excuse the comparison, but after a few years of XML, it is time to get over the hype that still holds parts of the industry hostage -- just my 2 cents).
Maybe you can provide us with a little more detail about your basic requirements -- translation seems to be one. Do you need to output data into different formats (HTML, print publications, online help)? Do you have to frequently re-use or update the same bits of information?
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