Best method for inter process communications

[JamesHoward]

I am looking for a way of performing inter process communication over
XML between a python program and something else creating XML data.

What is the best way of performing this communication?  I could bind a
socket to localhost and perform the data transfer that way, but that
seems inefficient due to the addition of TCP/IP or UDP/IP overhead.
Is there a way to stream data via a custom datastream (I.E. not STDIO,
STDERR, etc)?

Thanks in advance,
Jim Howard