I agree with the others that this is WAY too big of a request for a forum, and also haven't analyzed the steps in detail.  Having said that:

1) I would...

I think this is another reason for separate servers.  I am personally leery of having different versions of the same server code running on one machine.

I think the overriding factor...

Clifton, you hit heavily on my concerns (and experience) with XML in general and XML-SQLServer in particular.  I advise ALL of my clients to REALLY, REALLY try to avoid XML...

I can add one other reason to those mentioned (audit, isolation, hardware and software licensing costs).  With instances, you can tie each to specific processors thus limiting how much processing...

Truncate Only log backup will not affect the virtual log "devices" inside the file and thus a shrink is not guaranteed to get you much if any space back afterwards. ...

Has anyone tested to see if doing the XML thing is more or less costly than using a temporary table?

You gave NO useful information to help us solve your performance problem.  How much data?  Hardware situation? Where is distributor?  Network configuration/speed?  How much stuff is being replicated?  etc, etc.

As...

I agree with Jeff.  100M rows really isn't that much.  I have a client that uses a set of quarterly state tables to track keys representing the state of every...

If your database is single file, and you can take it off-line for a few minutes, the single fastest way to get rid of a huge log file is to...

If you have some flexibility you could split the table into two, each with < 255 columns of your choosing from the original table.  Link them via a small key...

I personally DESPISE having NULLs in a database, and try to always design them out if possible!   Sometimes you just gotta have them...

I have a client that is running 2 VMs on VMWare ESX server each with sql server and it is an absolute dog.  To be fair the machine doesn't have...

Mohamed we really need significantly more information to help you here.  Table definition(s), indexes, constraints, sample data, rowcount.  I will state without that though that if you desire to check...

Hate to say it Catherine but that is probably a really bad suggestion.  Removing the ability to accept NULL as a value can DRASTICALLY affect the logic of the data...

The shutdown was recommended prior to defragging your hard drive.  This is not required, but I have seen that most clients I have never change the default database settings and...