Eliot Kimber - InDesign CS3 and XML Authoring: Could be Good:
"The main gotcha here is that InDesign is sensitive to newlines in the XML data, because newlines trigger the application of paragraph styles. What I've found so far is that you have to manage the text content very carefully so that you only emit newlines at true paragraph boundaries.
[...] 6. Switch to InDesign and bring up the Links pallet. In that you'll find your XML document listed. Select it and click the "update link" button. Magically, your XML changes are re-imported into InDesign and the styles applied.
Hey presto! Immediate, easy, convenient pagination of XML using InDesign. Something that was not immediate, easy, or convenient with CS2."