Actually a good XML editor is a very useful tool and something that TDE has been lacking so far. KXMLEditor will fill that void.
I favor David's suggestion. If I am looking for an editor I either look in "Editor" or "Development", but definitely it wouldn't come natural to look into "File". If I can't the editor there, then I use the "menu search" field to locate where the editor was installed.
Having all general editors (text, hex and XML) in the same menu (utilities -> editor) is a reasonable idea and given that the number of editors is not that big, I don't see the "editor" menu becoming over busy.
Other people opinions are welcomed too, since it seems there is a little of disagreement on this matter.
Cheers Michele