index.nxml

xml.root do
  xml.foo do
    xml.bar
  end
end

nbuilder.rb

require 'nokogiri'
require 'action_view'

class NokogiriBuilder < ActionView::TemplateHandler
  include ActionView::TemplateHandlers::Compilable

  def compile template
    "_set_controller_content_type(Mime::XML);" +
      "xml = ::Nokogiri::XML::Builder.new { |xml|" +
      template.source +
      "}.to_xml; self.output_buffer = xml;"
  end
end

ActionView::Template.register_template_handler :nxml, NokogiriBuilder

testy_controller.rb

class TestyController < ApplicationController
  def index
    respond_to do |format|
      format.xml
    end
  end
end