How about this?
XmlDocument doc = new XmlDocument();
doc.Load(@"~/XML/XML.xml");
var nodes = doc.SelectNodes("warehouse/cat[@id='computer']/item/SN");
myDropDown.DataTextField = "InnerText";
myDropDown.DataValueField = "InnerText";
//now bind the dropdownlist to the dataview
myDropDown.DataSource = nodes;
myDropDown.DataBind();