Doesn't seem to be working right for me. Well when Im testing AJAX scripts anyway, the script fails where its trying to read the XML.

It does work, however, when I upload it to my hosting account. I would have expected XAMPP to handle it though? Doesnt it work just like a real server?

Give "localhost" a FQDN (Fully Qualified Domain Name) in your hosts file and access the site from that. Then see if it works.

open up the hosts file (usually located in %SYSTEMDRIVE%\%WINDOWSFOLDER%\system32\drivers\etc \)

and add a line of
127.0.0.1 www.mysite.local

resave the file as "hosts" No dot, No extension

then browse your site with www.mysite.local

Success!

Thanks.