At the end of that file there are a number of entries enclosed between <menuitem> and </menuitem>

Whatever is between "<!--" and "-->" is ignored (commented out).

Therefore your mission is to "comment out" the menuitem about top in xterm.

I would advise to use the comment marks separately for each menuitem. As it is now (probably) more than one menuitems are enclosed within comment marks, which makes it more difficult to explain what to do.

Try to edit a copy of the file on a computer, so that you can do it more comfortably, and don't copy it back to your N900 until you are satisfied with how it looks.

Alternatively (as a last resort..), you can post your .xml file and somebody (maybe I) will post it back corrected..