Do various XMLReader settings available in .Net Compact Framework version 2.0 really affect parsing performance?
Yes. You can substantially improve the performance of XMLReader by constructing an optimized reader and applying proper XMLReaderSettings. The optimal set of options obviously depends on the structure of XML you deal with, but in most cases setting XMLReaderSettings.IgnoreWhitespace to be true results in measurable performance gain (~30% on average), as typically there is a fare amount of whitespace in formatted XML documents. XMLReaderSettings.IgnoreComments can also be beneficial for comment-rich documents. Note that these options are not enabled by default. You must specify them explicitly by providing a configured instance of the XMLReaderSettings.