SimpleXML was introduced in PHP5 while XmlReader was only included by default in version 5.1, so the former is probably the best way to go:
$struct = simplexml_load_string($xml);
$version = (string)$struct->project->latest_release->latest_release_version;
However if you're not doing any other XML processing and want to maximise compatibility you could just regex the XML:
if(preg_match('/<latest_release_version>(.*)<\/latest_release_version>/', $xml, $matches)){
$version = $matches[1];
}
It's messier than processing the XML properly but is probably faster and supported by nearly all PHP installations.