Reformat XML in Visual Studio 2010
Yes you can :
Edit > Advanced > Format document (Ctrl+K Ctrl+D)
If you want to leave your right hand free to do something else, you can use Ctrl+E, Ctrl+D.
Not sure how this is different from Ctrl+K, Ctrl+D.
Not 100% sure about VS2010, but in VS2015 if you copy and paste a long string of XML into an .XML document, it will automatically reformat it.
("Format Document" is usually the way to go, just mentioning another option.)