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how to use xml data extension as datasourse in SSRS

We have an issue with reporting services 2005. I have to genererate a report with many fields in simple columns. But each column will have subreport to produce the values since each column is not related to one another, but there is a one common field that connect to the main Table. This report is overview of the data that is in Database to show in a summary format. With Sub reports I can create a normal parameter (int/string datatype) from main parent report, but this will keep the database server busy until the report renders all the data. And my teamlead doesnot want to keep the server busy and instead he suggested me to use **'xml Data Extension'** datasource. By using this way the report is connected to xml datasource and not directly to the database, and all data is fetched in XML file (generic file) one time. I didn't catch is point exactly. Please note the xml data extension will take the parameter values in XML format and as well produce the result in XML format, we will later transit the xml data into html using xslt. Could anyone please help me what exactly is 'xml data extension' data source and how it is used.
sql-server-2005ssrsreportingssrs-2005
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