XML::Twig:

use strict;
use warnings;

use XML::Twig qw( );

binmode STDOUT;

my $t = XML::Twig->new(
   twig_handlers => {
      '/Profile/Application' => sub {
         my $Id = $_->att('Id');
         my $CsID = (split(/\//, $Id))[-1];
         $_->set_att(Id => $CsID);
      },
   },
);
$t->parsefile($ARGV[0]);
$t->flush();
[download]

XML::LibXML:

use strict;
use warnings;

use XML::LibXML               qw( );
use XML::LibXML::XPathContext qw( );

my $doc  = XML::LibXML->new()->parse_file($ARGV[0]);
my $root = $doc->documentElement();

my $xpc = XML::LibXML::XPathContext->new();
$xpc->registerNs(x => 'xxxxxxxxx');

for ($xpc->findnodes('/x:Profile/x:Application', $root)) {
   my $Id = $_->getAttribute('Id');
   my $CsID = (split(/\//, $Id))[-1];
   $_->setAttribute(Id => $CsID);
}

binmode STDOUT;
print $doc->toString();
[download]

XML::LibXML is a bit wordier than XML::Twig (the 2 xpc lines) in order to handle namespaces correctly. (XML::Twig doesn't.)

Thanks a lot, makes sense now. I'll try out the libXML too.

Actually you can handle namespaces in XML::Twig, using the map_xmlns option. I am not sure it's worth doing in this case though (and it might be a good example of why I dislike seemingly gratuitous default namespaces, they just make processing harder while providing exactly 0 added value).

Also, if you use the id => 'Id' option in the new, you can then write $Id= $_->id and $_->set_id( $CsID); which I think is slighty clearer, and has the added benefit, if need be, to let you access an element directly through its id, using the elt_id method.

Ah good. I don't use XML::Twig, so I don't have a deep knowledge of it.

If it consistently ignored namespaces when map_xmlns isn't used, it would be a great shortcut despite being non-standard since there is rarely need to deal with namespace conflicts. (The module never claimed them to be a real XPaths.) Unfortunately, it doesn't consistently ignore namespaces.

On the plus side, it works according to standard when map_xmlns is used. (Well, I'm not sure how namespaces interact with attributes, so I'm simply commenting on elements.)

use strict;
use warnings;

use XML::Twig qw( );

my $xml = <<'__EOI__';
<?xml version="1.0" encoding="UTF-8" standalone="no" ?>
<root xmlns:foo="uri:foo">
  <ele id="a" />
  <ele id="b" xmlns="uri:foo"/>
  <foo:ele id="c" />
</root>
__EOI__


{
   my $seen = '';

   my $t = XML::Twig->new(
      twig_handlers => {
         'ele' => sub { $seen .= $_->att('id') },
      },
   );
   $t->parsestring($xml);

   print("$seen\n");
   print($seen eq 'a'                   ? "Standard\n"   : "Not standa
+rd\n");
   print($seen eq 'a' || $seen eq 'abc' ? "Consistent\n" : "Not consis
+tent\n");
}

print("\n");

{
   my $seen_null = '';
   my $seen_foo  = '';

   my $t = XML::Twig->new(
      map_xmlns => {
         'uri:foo' => 'f',
      },
      twig_handlers => {
         'ele'     => sub { $seen_null .= $_->att('id') || $_->att('f:
+id') },
         'f:ele'   => sub { $seen_foo  .= $_->att('id') || $_->att('f:
+id') },
      },
   );
   $t->parsestring($xml);

   print("$seen_null:$seen_foo\n");
   print($seen_null eq 'a'                        ? "Standard\n"   : "
+Not standard\n");
   print($seen_null eq 'a' || $seen_null eq 'abc' ? "Consistent\n" : "
+Not consistent\n");
   print($seen_foo eq 'bc'                        ? "NS working\n" : "
+NS broken\n");
}
[download]

ab
Not standard
Not consistent

a:bc
Standard
Consistent
NS working
[download]

use strict;
use warnings;
use XML::Twig;

my $x = <<EOF;
<?xml version="1.0" encoding="UTF-8" standalone="no" ?>

<Profile xmlns="xxxxxxxxx" name="" version="1.1" xmlns:xsi="http://
www.w3.org/2001/XMLSchema-instance">

        <Application Name="App1" Id="/Local/App/App1" Services="1" pol
+icy=""
StartApp="" Bal="5" sessInt="500" WaterMark="1.0"/>

<AppProfileGuid>586e3456dt</AppProfileGuid>

</Profile> 
EOF

my $t = XML::Twig->new(twig_handlers => {Application => \&app});
$t->parse($x);
$t->print();

sub app {
    my ($twig, $app) = @_;
    my $id = $app->att('Id');
    $id =~ s{^/Local/App}{};
    $app->set_att('Id', $id);
}
[download]

That would match Application elements anywhere, whereas the OP would only match Application elements under the root element. It might not make a difference, though.