use strict;
use warnings;

my ($output, $tag, $fh);

while (<DATA>) {
    chomp; s/^\s+//; s/\s+$//;
    if(/^{(.*)}$/) {    # {TAG} line
        $fh = output($output, $tag, $fh);
        $output = "";
        $tag = $1;
    } else {            # not a {TAG} line
        next unless($tag);
        next if(/^\s*$/);
        s/\\//g;
        $output .= ($output) ? " $_" : "<$tag>$_";
    }
}

$fh = output($output, $tag, $fh);
if($fh) {
    print $fh "</ROOT>\n";
    close($fh);
}
exit(0);


sub output {
    my ($output, $tag, $fh) = @_;
    if($output) {
        if($output =~ m/<FILE>(.*)/) {
            if($fh) {
                print $fh "</ROOT>\n";
                close($fh);
            }
            open($fh, '>', "$1.xml") or die "$1.xml: $!";
            print $fh "<?xml version=\"1.0\"?>\n<ROOT>\n";
        }
        print $fh "$output</$tag>\n";
    }
    return($fh);
}

__DATA__
^B^B^B^B^B^B
{FILE}
sourcetag1
{NUMBER}
00000

{SOURCE}
source1
{KEYWORD}
{AUTHOR}
author1
staff1
{HEADLINE}
DISPOSABLE DECOR: THE CUTTING EDGE DULLS FAST\
STYLE AT A SPEED
USUALLY ASSOCIATED WITH WARDROBE ITEMS.

{FILE}
sourcetag2
{NUMBER}
00002
{SOURCE}
sourcenam2
{KEYWORD}
{AUTHOR}
author2
staff2