If your XML is really that simple, you can use SimpleXML to CRUD it. SimpleXml will parse the XML into a tree structure of SimpleXmlElements. In a nutshell, you use it like this:
// CREATE
$config = new SimpleXmlElement('');
$config->setting1 = 'setting1 value';
$config->saveXML('config.xml');
// READ
$config = new SimpleXmlElement('config.xml');
echo $config->setting1;
echo $config->asXml();
// UPDATE
$config->setting1 = 'new value';
$config->setting2 = 'setting2 value';
echo $config->asXml();
// DELETE
unset($config->setting1);
$config->setting2 = NULL;
echo $config->asXML();
unlink('config.xml');
Please refer to the PHP manual for further usage examples and the API description.
On a sidenote, if you really just have key/value pairs, you could also use a plain old PHP array to store them or a key/value store like DBA or even APC and memcached with a long ttl.