>IE will open either file. Why do I need 2 levels from XMLTOCURSOR() to run? Is this a requirement of XML or a bug in XMLTOCURSOR()?

Both are XML, which is why IE opens them. However, for VFP to actually create a cursor, it neds two dimensional data from XML. You need all three tags, one is the root tag (this equals the cursor), a tag for the row, and a tag for the field. Does that make sense?