The configuration stuff (i.e. what should be enabled/disabled) is in xmlversion.h
I only tested it compiled fine with the current settings 
(that is nearly everything disabled, I didn't need many features)

----------------------------

How did I get everything in place so the MSDev project works from the original archive?

from the cygwin prompt (http://sources.redhat.com/cygwin) :
$ ./configure --disable-corba --without-ftp --without-http --without-html --wit
hout-xpath --without-iconv --without-debug

created a libxml directory and copied the following headers in:
HTMLparser.h       entities.h         tree.h             xmlIO.h
HTMLtree.h         nanoftp.h          uri.h              xmlmemory.h
SAX.h              nanohttp.h         valid.h            xmlversion.h
debugXML.h         parser.h           xlink.h            xpath.h
encoding.h         parserInternals.h  xml-error.h

modified win32config.h to comment out 
#define LIBXML_VERSION 20204
#define LIBXML_VERSION_STRING "2.2.4"
(is already in xmlversion.h)

built the project file for the static library

----------------------------

diff after doing the changes and cleaning up the generated stuff:

Only in libxml2-2.2.4: MSDev
Common subdirectories: libxml2-2.2.4/SAXresult and libxml2-2.2.4-reference/SAXresult
Common subdirectories: libxml2-2.2.4/doc and libxml2-2.2.4-reference/doc
Common subdirectories: libxml2-2.2.4/example and libxml2-2.2.4-reference/example
Only in libxml2-2.2.4: libxml
Common subdirectories: libxml2-2.2.4/result and libxml2-2.2.4-reference/result
Common subdirectories: libxml2-2.2.4/test and libxml2-2.2.4-reference/test
Only in libxml2-2.2.4: win32config.h
diff libxml2-2.2.4/xmlversion.h libxml2-2.2.4-reference/xmlversion.h
38c38
< #if 0
---
> #if 1
47c47
< #if 0
---
> #if 1
56c56
< #if 0
---
> #if 1
74c74
< #if 0
---
> #if 1
83c83
< #if 0
---
> #if 1
92c92
< #if 0
---
> #if 1