You just have your xpath wrong:
xmlstarlet sel -t -c '//node'
Also, valid XML required all attribute values to be quoted
<document>
<nodes>
<node id="123">pages of txt</node>
<node id="124">more example pages of txt and sub elements</node>
</nodes></document>
I've found this page gives lots of useful xpath examples: http://msdn.microsoft.com/en-us/library/ms256086(v=vs.110).aspx