Usually if the upload folder looks like this (example):
upload
- afile.php
- includes (folder)
- - xml (folder)
- - - anotherfile.xml
That means you would upload afile.php to your main directory with the rest of your vbulletin files and then upload anotherfile.xml into the includes/xml directory.
Most of the xml files are products and thus you upload them on the products page.
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