I find that the Eclipse XML editor always inserts tabs for spaces even if you have the “Insert spaces for tabs” option checked under Window->Preferences->General->Editors->Text Editors.
You can open any XML file, and then do CTRL-SHIFT-F to format the file and you’ll see this behavior (all your spaces will be replaced with tabs where appropriate).
I noticed this behavior with Ganymede, and just upgraded to Galileo today and was hoping it was fixed, but it seems to be the same.
Is this a bug, or am I doing something incorrectly?
Go to Windows > Preferences > XML > XML Files > Editor and select Indent using spaces: