With version 5 of the NDK, Google has finally included support to access APK from native code without using my "hack" anymore.
I haven't experimented with it yet, but I would recommend looking into it :http://developer.android.com/sdk/ndk/index.htmlhttp://developer.android.com/reference/ ... ivity.html
(Also see the docs/CHANGES.HTML included in the ndk).
Now, to answer your question, the point of using libzip is not to worry about compression. So you could read your XML file using the same code that I use to read my textures (libzip is used to decompress on-the-fly).
But really, you'd better do it using the official NDK way.
Hope this helps.