SQL Server 2005 should ble able to do that I think, and the express version is free. I think Sleepycat has a free XML database as well.

The W3C grants Recommendation status to XQuery, the XML query language designed to do for Web services what SQL did for relational databases. On Jan. 23, 2007 the W3C granted Recommendation status to ...

Customers say they want them, vendors are scrambling to provide them, and opinions vary as to how to set them up correctly. They are XML databases, a way to store, search, and retrieve all that ...