What version of Composite C1 are you running?
While the exception info is a bit off, this could be an issue which could appear in earlier versions of Composite C1 (before v. 4) where a XML document on disk got corrupted (can happen if the web process is killed in the middle of a file write) - you can check if this is the can by ensuring the files in ~/App_Data/Composite/DataStores are healthy xml documents. If one arpear to be broken, replace it with just a <root /> node or a backup of the file. If this is the cause post the filename here and I'll let you know if it is but a temp file with no significant content.
While the exception info is a bit off, this could be an issue which could appear in earlier versions of Composite C1 (before v. 4) where a XML document on disk got corrupted (can happen if the web process is killed in the middle of a file write) - you can check if this is the can by ensuring the files in ~/App_Data/Composite/DataStores are healthy xml documents. If one arpear to be broken, replace it with just a <root /> node or a backup of the file. If this is the cause post the filename here and I'll let you know if it is but a temp file with no significant content.