I have a web site based on numbers of relatively small xml documents
(currently stored as flat files).

...
d) Combine all/many of the small file into one/few larger one.
Works up to a few MB total data. Effective caching is recommended,
if you use saxon, have some looks at the internals, you can cache
key tables and nearly everything else (at the risk of major work
in case of an upgrade), really good work.
Perhaps i'll post some stuff if i come around cleaning it up
a bit.