It isn't obvious at first glance that this small xml file actually expands to billion "lols". You really have to give the bad guys credit for ingenuity.
So, how much memory would a real-world parser actually consume given this file? I'd try it, but I had to RMA my workstation's motherboard yesterday, leaving me with a machine that only has 3GB, which is the obvious minimum for a full expansion. But I could imagine an XML parser might use UCS-2 internally, inflating this to 6GB. Or, some parsers might be clever and not attempt a full expansion.