It really depends a lot on how your site is setup and how many languages you are looking to do. I personally would go with PHP as it's very versatile and allows you to create additional languages "on the fly" if you will.
PHP would also allow you to keep one "maser set" of actual content display files (the structure of your page) and with language calls inside it would then pop in the proper text/images where needed.
If you were to just copy the site to another folder and change all the text to another language you would have to make any edits to the site twice. i.e. if you wanted to add an element to a page (lets say a helpdesk link) you would have to do it on however many copies you have of the page for each language.
XML is certainly an option for pulling the language down and PHP5 has really nice XML support in it.