>In Windows 8.1, Internet Explorer is configured to open a XML file as a text file inside the browser. I am trying to remember where is that setting that forces it to recognize that this is a XML file. Or, is that a new security in Windows 8.1 that makes things more difficult now?

It's the same as Win7

In the windows explorer, rightclick on an xml file, Open with

You then have a list of possibilities and also an option 'Choose default program'