a. can you use standard HTML in XML or not
I interpret you want to show the xml content in a html text field and you want to add marks like <b> and <i>, but you know they can be parsed in the xml like childnodes ok?
I recomend you to escape your xml content (in flash [font=Courier New]escape(stringVariable)[/font] ) and then, when you are parsing it, just unescape it ([font=Courier New]unescape(escapedString)[/font] ) and put it on your html text field