I'd assume it wouldn't be, since the iPod can have a small subset of the songs in your iTunes library.
My recommendation is that you backup the damaged xml file, and move it so iTunes doesn't find it. When you start iTunes, the library will be empty. Then reimport your music folder. All the ID3 tags should come across OK, as iTunes stores info like Title, Artist and Album in the song file itself (unless the file is not write-able, in which case it does indeed use the XML file).
Only the "My Rating", "Play Count" etc are kept in iTunes Music Library.xml file.