Jay, can InitTool get the XML directly from the cut buffer, ie. the clipboard?
I'm thinking it would be nice for the user to highlight a chunk of text, activate the InitTool window, then type Ctrl-V (or some other keystroke), and presto! the group now exists! And the user doesn't have to go through the pain of creating a file somewhere (on the desktop?), open it, paste into it, save it, then select File->Open... in InitTool, etc.