[dba-SQLServer] XML setting files

I know this is a little off topic but we do use SQL Server with XML
and I know next to nothing about XML, but I have been tasked with
going into some settings files and adding the application name to the
connection string, and replacing the in line SQL with a stored
procedure.
All of the files are named 'settings.xml'  no matter what they are used for
or in, it is always settings.  I suggested we might want to change the file
name to something more descriptive than settings, but my boss says that the
file must be named 'settings.xml'.  Is that true?  Or is it that if we
rename the file, we must also rename in the application .exe?
My supervisor stated 
"The settings file is use as input into the XML process, it works kind
like the .ini file.  However the XML software looks for a file name
settings.xml"
Already I have run across a situation in SourceSafe where a settings
file was listed under the wrong process, which is what I think we
should be trying to prevent.

Thanks in advance,
Nancy