XML format is a non-starter for me. It adds too much cruft to the text; it requires putting everything inside of open and close tags, including paragraphs.
HAML for content: http://chriseppstein.github.io/blog/2010/02/08/haml-sucks-fo... (its not so bad :P)
Is there some program that converts Markdown into TeX? Or are you saying that you do this manually?
LaTeX is much nicer to hand edit, and if you're not hand editing you may as well use Word or something.
Definitely agree that at a per-paragraph level that's way too much markup.
I'm writing a document. I want the default text entry to be that document. There's already a lot of noise in my Latex sources; I want less, not more. (And I recognize that we actually agree on this.)