The installer launch a standard Windows API call to validate your original DLL.XML file before changing it. If that file, for any reason (usually a previous manual edit) is not 100% syntactically correct, the installer will not touch it, and will issue such warning. FSX will never complain about syntax errors in DLL.XML, it will simply not execute the module in the section with the error, so it might easily go unnoticed.
You will probably get a similar error if you opened that file with IE. It might be simply easier if you post your DLL.XML file here, so I can tell you were the error is. The file can be located at:
%APPDATA%\Microsoft\FSX
just execute the above command from the Start Menu