That's a very broad question, and is more of a discussion question which is possibly not suitable for Stackoverflow's Question/Answer structure. I can answer some of the specific points you raised though.
If you want a Flash based website which uses XML to load a bunch of external content (external to the swf file itself), then you would need to load the swf first, and then inside the swf you'd need ActionScript which would first load the XML file, then parse it for whatever you're looking for (say paths to images) and finally load those images.
A good place to start would be the docs, as always, and find out about Loader, XML and XMLList classes, in ActionScript 3. Here's the docs, if you've not already found them: http://www.adobe.com/livedocs/flash/9.0/ActionScriptLangRefV3/
Hope that'll be of some help. You're probably best off choosing a small part of the entire website project and attempting to implement it, say a photo gallery, then coming back with any specific questions or problems you run into.
debu