When parsing install manifests (just an xml file), the installation script ( libraries/joomla/installer/installer.php ) does:
J 1.5:
JFactory::getXMLParser('Simple')
the 1.5 one invokes a "JSimpleXML" which appears to be a re-creation of simplexml which didn't exist in php 4.* (which J1.5 supports).
J 2.5:
$xml = JFactory::getXML($file)
This in turn creates a simplexml object for all the caller's xml needs
I'd suggest using the same methods as the Joomla core. Failing that just going to simplexml seems reasonable.
:-Dave