Some XML tools have been added with the SP1 for Visual Studio 2008 and dotNet Framework 3.5. Visual designer took a step back, though.
So, here are some free XML tools available as a Community Edition of Liquid XML Studio 2008: download here.
Liquid XML Studio is a fully featured graphical development environment for XML Schema (XSD) and XML documents.
To see the differences between the Community and the paid edition click here.