I prefer a simple XML rendering (and Atom seems way too heavy) for all
the requests. That includes putting in things like set, destroy,etc. The
protocol step should be to map the definitions into something bitsy!
If you have to parse XML anyway (which I agree can be a PITA, hence adopting Chris & Richard's suggestions for text/json equivalents) then it's incrementally more difficult to use an existing schema. Corners cut now will certainly come back to bite us later, and as we flesh things out I'm sure you will agree that Atom more than pulls its weight in this context.
The value of existing developers and client implementations is not to be understated either.