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Building a dynamic content system using XML-enabled technologies is done exactly like building a dynamic content system without using XML-enabled technologies. Don't use XML-features because it's the latest buzzword and you like to have as many buzzwords as possible included, but because you have identified certain features or techniques that could benefit from XML and its feature set.
If you need to do transformations on structured data that's in XML form, use XSLT. If you need XML documents that follow a strict convention, use XML Schema validation. If you need to manipulate or access data that's in XML form, use XML DOM or SAX. If you need to do searches into XML data, use XML Query etc.
Once you've identified the required features of your dynamic content service, detail them on some public forum and ask peoples' opinions on how they would do it, or study samples of working solutions and see which of them match your requirements.
Anything that can be done with XML can be done without XML. In some cases it's the right tool for the job, and only by experimenting and studying existing solutions can you learn when and where to use it.
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