The mainstream practice in .NET is to use XML Serialization.  
In your case, I would do this:
- run the xsd.exe too on .XSD to generate source code for classes (xsd /c)
 
- build your app that utilizes those generated classes.  Keep in mind you can extend those classes via the "partial classes" technique 
 
- in code, instantiate an XmlSerializer, and Serialize the class instances.
 
Example: 
Given this schema: 
<xs:schema elementFormDefault="qualified" xmlns:xs="http://www.w3.org/2001/XMLSchema">
  <xs:element name="Foo" nillable="true" type="Foo" />
  <xs:complexType name="Foo">
    <xs:sequence>
      <xs:element minOccurs="0" maxOccurs="1" name="Bar" type="xs:string" />
      <xs:element minOccurs="0" maxOccurs="1" name="Baz" type="UntypedArray" />
    </xs:sequence>
  </xs:complexType>
  <xs:complexType name="UntypedArray">
    <xs:choice minOccurs="1" maxOccurs="unbounded">
      <xs:element name="Type1" type="Type1"                 minOccurs="1" maxOccurs="1"/>
      <xs:any     namespace="##other" processContents="lax" minOccurs="1" maxOccurs="1"/>
    </xs:choice>
  </xs:complexType>
  <xs:complexType name="Type1" mixed="true">
    <xs:sequence>
      <xs:element minOccurs="0" maxOccurs="1" name="Child" type="xs:string" />
    </xs:sequence>
  </xs:complexType>
</xs:schema>
xsd.exe generates this source code: 
[System.CodeDom.Compiler.GeneratedCodeAttribute("xsd", "2.0.50727.42")]
[System.SerializableAttribute()]
[System.Diagnostics.DebuggerStepThroughAttribute()]
[System.ComponentModel.DesignerCategoryAttribute("code")]
[System.Xml.Serialization.XmlRootAttribute(Namespace="", IsNullable=true)]
public partial class Foo {
    private string barField;
    private object[] bazField;
    /// <remarks/>
    public string Bar {
        get {
            return this.barField;
        }
        set {
            this.barField = value;
        }
    }
    /// <remarks/>
    [System.Xml.Serialization.XmlArrayItemAttribute("", typeof(System.Xml.XmlElement), IsNullable=false)]
    [System.Xml.Serialization.XmlArrayItemAttribute(typeof(Type1), IsNullable=false)]
    public object[] Baz {
        get {
            return this.bazField;
        }
        set {
            this.bazField = value;
        }
    }
}
/// <remarks/>
[System.CodeDom.Compiler.GeneratedCodeAttribute("xsd", "2.0.50727.42")]
[System.SerializableAttribute()]
[System.Diagnostics.DebuggerStepThroughAttribute()]
[System.ComponentModel.DesignerCategoryAttribute("code")]
public partial class Type1 {
    private string childField;
    private string[] textField;
    /// <remarks/>
    public string Child {
        get {
            return this.childField;
        }
        set {
            this.childField = value;
        }
    }
    /// <remarks/>
    [System.Xml.Serialization.XmlTextAttribute()]
    public string[] Text {
        get {
            return this.textField;
        }
        set {
            this.textField = value;
        }
    }
}
In your app you can instantiate a Foo and then serialize, like this: 
    Foo foo = new Foo();
    // ...populate foo here...
    var builder = new System.Text.StringBuilder();
    XmlSerializer s = new XmlSerializer(typeof(Foo));
    using ( var writer = System.Xml.XmlWriter.Create(builder))
    {
        s.Serialize(writer, foo, ns);
    }
    string rawXml = builder.ToString();
This example serializes into a string.  Of course you can serialize to other XmlWriters, you can write out to a file, to any arbitrary stream, and so on. 
Normally I tweak the serialization to omit the XML declaration, omit the default xml namespaces, and so on.  Like this:
    Foo foo = new Foo();
    // ...populate foo here...
    var builder = new System.Text.StringBuilder();
    var settings = new System.Xml.XmlWriterSettings { OmitXmlDeclaration = true, Indent= true };
    var ns = new XmlSerializerNamespaces();
    ns.Add("","");
    XmlSerializer s = new XmlSerializer(typeof(Foo));
    using ( var writer = System.Xml.XmlWriter.Create(builder, settings))
    {
        s.Serialize(writer, foo, ns);
    }
    string rawXml = builder.ToString();
You can also do the reverse - map from an XML document to an in-memory object graph - using the XmlSerializer.  Use the Deserialize method.