Looks like you may be mixing features here a bit. From what you're saying, it looks like you are trying to import this file using the admin-based import from xmlfile. That feature is not the same as WSI, and the two expect entirely different xml structures. The one in the admin section is obsolete and has been replaced with WSI for completing xml-based imports, however the admin section does not yet have an interface for executing WSI-syntax xml documents or snippets. To import, you should use the WSI import tool which you can download here
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