Hi Powmari1,
If you get the "xml missing" message then I believe Peggy is almost certainly correct in pointing out that is caused by inadvertently launching Numbers 2x (iWork '09) when opening a document. That can happen much more easily than one would think, sometimes by just double-clicking a document in Finder. In fact, the subject has come up so often that it is even the subject of a popular user tip by Wayne. The "xml missing" message (a common one, in addition to the one Wayne illustrates in his user tip) is a pretty sure tipoff that is indeed what occurred in your case, because from version 3 on Numbers has used entirely different "file" formats and therefore doesn't look for xml.
This isn't really a "user error"; it's more "user taken by surprise" because a lot of people upgrading from a previous version of an app aren't necessarily expecting an old version to still be there that can be activated by double-clicking a document or clicking a familiar icon in the Dock.
It is likely that Apple chose to leave the old version on the machines of upgraders because while Numbers 2 and later versions share the same name, they are quite different apps. Many users were heavily dependent on Numbers 2 features that didn't make the cut in later versions. As later versions have matured, the need to keep Numbers 2 around has diminished, at least in my case. If you've already trashed Numbers 2 you may never miss it. But it can be nice to have around, just in case. I don't believe there is any conflict between it and the latest version. You can have both versions running at the same time if you wish. It's just that you've got to keep straight which documents you want to open with which version.
The way I make sure I am opening a document in the version of Numbers that I want is to first open the app and then File > Open and navigate to the document.
In general, as suggested above, I tend to rebuild important documents from scratch rather than rely on Numbers to do the document upgrading.
SG