XML as database

Hi all,

I want to develop a application I could distribute, I'm looking at all the database options.
MySql ans MSDE are great but  takes spaces in a package and are not easy to integrate  in a setup package.
I don't like Access DB because it tends to corrupt or increase in size if no maintenance is made on the DB.

I was wondering if pure XML files manipulated with ADO.NET would be a good solution.
I made some little tests and it is possible to work with those files as a standard dataset.
Is there performance issues?
Is query are working like any other DB (ex. select * from tableX inner join tableD on tableX.f1 = tableD.f1)

Thanks for any advice