Can I see any benefit? Well, yes and no. If you are looking for the best performance, go with the ref cursors. If you are looking for the best maintainability, go with XML. Your needs are probably somewhere in between those two extremes.
.NET is based on XML and has a lot of ease-of-use features for working with XML. Your developers are probably very comfortable working wth XML. Those would be benefits from providing them XML.
There are downsides though. Additional coding on the database side (but not much anymore in 10g) and some performance hit (but not nearly as bad as it used to be).
I guess my answer is that it depends. Without more information I can't make a specific recommendation but I will say the XML has its pluses. Check out the XMLType datatype. If you can use that, your coding will be minimal.
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