Generate POCO objects from xml file

You could (and should) define a xsd which describes your XML file. From this XSD you can generate classes using xsd.exe.

If you need more control over your code generation (e.g. you aren't happy with the output of xsd.exe, want to add attributes, make changes, ...) you can use System.Xml.Serialization.XmlSchemaImporter, System.Xml.Serialization.XmlCodeExporter and CodeDom to adjust the generated code.

Yes,it can be done. Take a look at T4 text templetes http://www.hanselman.com/blog/T4TextTemplateTransformationToolkitCodeGenerationBestKeptVisualStudioSecret.aspx