The question becomes defining what "readable" means. In these cases, I tend to think that the software can read it, so that's one level or readability, and I can read it to a certain level, so that's another level of readability. Does your average user need to dive into the xml? Hopefully not - your software should be what's taking care of the data (who knows what a user can do to it), and if you do need the user to modify the data in an xml file, then provide a file editor that protects the stuff they shouldn't play with, and only exposes encapsulated access to the things they should.
I know it doesn't answer your question, but I think your question might lead to others in the application of your architecture.