Either load the file directly using the text editor's LoadFile method.
textEditor.LoadFile(@"d:\temp\test.xml");
Or if you are using a string then use the HighlightingManager to get the correct syntax highlighting. You can either use the FindHighlighterForFile method
textEditor.Document.HighlightingStrategy = HighlightingManager.Manager.FindHighlighterForFile(".xml");
Or the FindHighlighter method
textEditor.Document.HighlightingStrategy = HighlightingManager.Manager.FindHighlighter("XML");
The highlighting manager is in the ICSharpCode.TextEditor.Document namespace.