One of the *best simple XML formatting tool for Windows 7* I think it is Notepad++:
This tool is so powerful that it should be in the developer current toolbox.
Just look how many formats it recognizes:
But, the best of all is the fact you can define your own language and to apply your own rules!
Did I tell you about its search & replace? You can do all kind of replacements grace to the regular expressions and if you have hundreds (!) of open files, you can perform the search and/or replacements in all the documents, in an instant!
Don't forget there are a lot of plugins, which can be installed for all kind of jobs!
To conclude, Notepad++ is free and portable (you can use it on a usb stick, just copy it in any folder you want).
EDIT:
As I told you, a lot of Notepad++ functionality is provided by plugins:
If you click on each plugin name you'll see a short description about the functionality provided.
To achieve extremely advanced indentation I recommend you to install, at least, the Code alignment, Indent by Fold and XML Tools:
