I think the path is okay, I displayed it in an alert and it looked correct. (There may be a typo in my example since I couldn't paste it in.) I missed the detail of "privileged context", I'm new to javascript and scripting pdfs.
I added my form "working" folder to the security section as a privileged location and the readFileIntoStream command worked. Means we would need to get each user to do this.
The idea of attaching the xml to the pdf sounds good, but I don't think I could do that from an outside application. Each time one of these forms will be used it is copied from a template and then the xml is generated to pre fill the form. This is not done in Acrobat but in our own application and done on each individuals computer, not centrally.
Thanks for the suggestions.