to answer your question...
">> Is there a method where I can use in ActionScript so that if there is a Invalid formatted record
>> it doesn't stop loading the data but skips over that XML record?"
no... your XML has to be valid... even using a try catch in actionscript is not the answer, because the data has to be well formed BEFORE it gets into the programming.
I would recommend restricting who can update the XML, AFTER you make sure it is completely validated and accessible to AS 3 code.
rp / ZA