It is described at http://tools.android.com/recent that new XML Formater is available with SDK 12, I’ve installed one, but still can’t see those settings for XML formatting like this:

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As I understand http://tools.android.com/recent, the page describes the latest checkins in the repository. In fact, the post by Tor Norbye that you refer to is dated 10 Aug, the same day XML-related code was merged into the main trunk, e.g. https://android.googlesource.com/platform/sdk/+/7b69d9a11b46a364d816f6fd2791f201ac581fb6
In other words, these features do not seem to be in any release yet.