Today, I have been working with the CRM2011 Developer Toolkit on a new machine and getting problems to connect to Microsoft Dynamics CRM Online. When using “orgname.crm5.dynamics.com” port 443 and https to connect, I am getting “There is an error in XML Document(5, 5)”. Found this issue related to LiveDevice.xml cache on the local machine, deleted the file from c:\Users\{your user name}\LiveDeviceID\ resolved the connectivity issue! 
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