Sitemap doesn't show as xml

Question 1

Here's what we do to generate the sitemap for autoquoter.com. See http://www.autoquoter.com/aq/sitemap.xml

        var sitemap = new XDocument(
            new XDeclaration("1.0", "utf-8", "yes"),
            new XProcessingInstruction("xml-stylesheet",
                "type=\"text/xsl\" href=\"" + Url.AbsoluteAction("SitemapXsl", "Default") + "\""),
            new XElement(ns + "urlset",
                new XAttribute(XNamespace.Xmlns + "sitemap", ns),
                new XAttribute(XNamespace.Xmlns + "xhtml", xhtml), 
                nodeList));

        Response.AddHeader("X-Robots-Tag","noindex");
        return Content(sitemap.Declaration+"\r\n"+sitemap, "text/xml");

We also use an xsl stylesheet to transform the sitemap. This helps with browsers that don't provide a decent formatter automatically. See http://www.autoquoter.com/aq/en/Default/SitemapXsl for the stylesheet that we are using.

Question 2

EDIT 1:

It seems that you may lose some of the xml specific header files:

Check this link out

This might also be a valid example on how to create an xml site map:

Sitemap xml for google Another example
OPTION1 Try this code out(taken from here):

    [WebService(Namespace = "http://tempuri.org/")]
    [WebServiceBinding(ConformsTo = WsiProfiles.BasicProfile1_1)]
    public class Sitemap : IHttpHandler
    {
        private const string NAMESPACE = "http://www.sitemaps.org/schemas/sitemap/0.9";

        public void ProcessRequest(HttpContext context)
        {
            context.Response.ContentType = "text/xml";
            XmlDocument sitemapDocument = GetSitemapDocument();
            context.Response.Write(sitemapDocument.InnerXml);
        }

        #region Build sitemap document methods
        private XmlDocument GetSitemapDocument()
        {
            XmlDocument sitemapDocument = new XmlDocument();
            sitemapDocument.PreserveWhitespace = true;

            XmlDeclaration xmlDeclaration = 
                sitemapDocument.CreateXmlDeclaration("1.0", "UTF-8", string.Empty);
            sitemapDocument.AppendChild(xmlDeclaration);

            XmlElement urlset = sitemapDocument.CreateElement("urlset", NAMESPACE);
            sitemapDocument.AppendChild(urlset);

            List<SitemapPage> urls = GetSitemapPages();

            foreach (SitemapPage sitemapPage in urls)
            {
                XmlElement url = CreateUrlElement(sitemapDocument, sitemapPage);
                urlset.AppendChild(url);
            }
            return sitemapDocument;
        }

        private XmlElement CreateUrlElement(XmlDocument sitemapDocument, 
            SitemapPage sitemapPage)
        {
            XmlElement url = sitemapDocument.CreateElement("url", NAMESPACE);

            XmlElement loc = CreateElementWithText(sitemapDocument, "loc", 
                sitemapPage.Location);
            url.AppendChild(loc);

            if (sitemapPage.LastModificationDate.HasValue)
            {
                //lastmod must be a string that comforms to the W3C Datetime format
                string lastModValue = sitemapPage.LastModificationDate.Value.ToString(
                    "yyyy'-'MM'-'dd'T'HH':'mm':'ssK");
                XmlElement lastmod = CreateElementWithText(
                    sitemapDocument, "lastmod", lastModValue);
                url.AppendChild(lastmod);
            }

            if (!string.IsNullOrEmpty(sitemapPage.ChangeFrequency))
            {
                XmlElement changefreq = CreateElementWithText(sitemapDocument, 
                    "changefreq", sitemapPage.ChangeFrequency);
                url.AppendChild(changefreq);
            }

            if (sitemapPage.Priority.HasValue)
            {
                XmlElement priority = CreateElementWithText(sitemapDocument,
                    "priority", sitemapPage.Priority.Value.ToString(
                        CultureInfo.CreateSpecificCulture("en-US")));
                url.AppendChild(priority);
            }

            return url;
        }

        private XmlElement CreateElementWithText(
            XmlDocument document, string elementName, string text)
        {
            XmlElement element = document.CreateElement(elementName, NAMESPACE);

            XmlText elementValue = document.CreateTextNode(text);
            element.AppendChild(elementValue);

            return element;
        }
        #endregion

        private List<SitemapPage> GetSitemapPages()
        {
            List<SitemapPage> sitemapPages = new List<SitemapPage>();

            //Example implementation
            sitemapPages.Add(new SitemapPage("http://www.mydomain.com") 
                { ChangeFrequency = "daily", LastModificationDate = DateTime.Now, Priority = 1f });
            sitemapPages.Add(new SitemapPage("http://www.mydomain.com/aPage.aspx") 
                { ChangeFrequency = "daily", LastModificationDate = DateTime.Now, Priority = 0.8f });

            return sitemapPages;
        }

        private class SitemapPage
        {
            public SitemapPage(string location)
            {
                Location = location;
            }

            public string Location { get; private set; }
            public DateTime? LastModificationDate { get; set; }
            public string ChangeFrequency { get; set; }
            public float? Priority { get; set; }
        }

        public bool IsReusable
        {
            get
            {
                return true;
            }
        }
    }

OPTION2: According to MSDN this is a valid sitemap: sitemap MSDN.

Check this output out:

<siteMap>
  <siteMapNode title="Home" description="Home" url="~/default.aspx">
    <siteMapNode title="Products" description="Our products"
      url="~/Products.aspx">
      <siteMapNode title="Hardware" description="Hardware choices"
        url="~/Hardware.aspx" />
      <siteMapNode title="Software" description="Software choices"
        url="~/Software.aspx" />
    </siteMapNode>
    <siteMapNode title="Services" description="Services we offer"
        url="~/Services.aspx">
        <siteMapNode title="Training" description="Training classes"
          url="~/Training.aspx" />
        <siteMapNode title="Consulting" description="Consulting services" 
          url="~/Consulting.aspx" />
        <siteMapNode title="Support" description="Supports plans" 
          url="~/Support.aspx" />
    </siteMapNode>
  </siteMapNode>
</siteMap>

Maybe you should try change your code:

public class XmlSitemapResult : ActionResult
{
    private XNamespace nsSitemap = "http://www.sitemaps.org/schemas/sitemap/0.9";
    private XNamespace nsXhtml = "http://www.w3.org/1999/xhtml";

    private IEnumerable<SitemapItem> _items;

    public XmlSitemapResult(IEnumerable<SitemapItem> items)
    {
        _items = items;
    }

    public override void ExecuteResult(ControllerContext context)
    {
        string encoding = context.HttpContext.Response.ContentEncoding.WebName;
        XDocument sitemap = new XDocument(new XDeclaration("1.0", encoding, "yes"),
             new XElement(nsSitemap + "siteMap", new XAttribute(XNamespace.Xmlns + "xhtml", nsXhtml),
                  from item in _items
                  select CreateItemElement(item)
                  )
             );

        context.HttpContext.Response.ContentType = "application/xml";
        context.HttpContext.Response.Charset = encoding;
        context.HttpContext.Response.Flush();
        context.HttpContext.Response.Write(sitemap.Declaration + sitemap.ToString());
    }

    private XElement CreateItemElement(SitemapItem item)
    {
        XElement itemElement = new XElement(nsSitemap + "siteMapNode", new XElement(nsSitemap + "loc", item.Url.ToLower()));

        if (item.LastModified.HasValue)
            itemElement.Add(new XElement(nsSitemap + "lastmod", item.LastModified.Value.ToString("yyyy-MM-dd")));

        if (item.ChangeFrequency.HasValue)
            itemElement.Add(new XElement(nsSitemap + "changefreq", item.ChangeFrequency.Value.ToString().ToLower()));

        if (item.Priority.HasValue)
            itemElement.Add(new XElement(nsSitemap + "priority", item.Priority.Value.ToString(CultureInfo.InvariantCulture)));

        foreach (var alternateLink in item.AlternateLinks)
        {
            itemElement.Add(new XElement(nsXhtml + "link", 
                new XAttribute("rel", "alternate"),
                new XAttribute("hreflang", alternateLink.Language),
                new XAttribute("href", alternateLink.Url)));
        }

        return itemElement;
    }
}