You could create classes containing the necessary properties and then simply parse the file and populate those classes in-memory. Here you go, you've got an in-memory database.
I only have a minimal knowledge of LINQ
Here's a good start for you: http://code.msdn.microsoft.com/101-LINQ-Samples-3fb9811b
where do I define this structure (an XML file, in-code, wizard, drag and drop)?
If you want to store the data in-memory define strongly typed C# classes that match your data.
what data objects do I need?
That would entirely depend on what information you have in your file and you want to handle.