Sqlite is probably overkill, you will probably never have actual relational data in an image format, But what it does bring to the table is a built in b-tree based storage, that is, you don't need to load the entire file into memory to edit it, in a prior age we would use Berkeley db for this. Sqlite in this role(a file format) is probably best thought of as a better superset of the berkleydb style key value store, more than one table per file and additional columns/indexes to keep metadata in.

Nothing wrong with XML, it is well understood, and the tooling is pretty good. But partial loads/edits is one thing it can not do.