going from heirarchical XML to heirarchical SQL tables then SQL to c# objects to go to user view, how should I store the data in the databases?

Question

Hi I'm getting my data from a web service using their getData call and it comes in as fairly chunky heirarchical XML, first everything all at once, like

<allData>
 <product1>
  <property1>
     <subProperty1>
     </subProperty1>
     [...other sub properties]
  </property1>
 <product1>

[...product2, product3,]

</allData>

Update/ picture for question clarity (Flow I am concerned with now is Right to Left):

Is this a good way to do it? So we have XML Data coming externally, deserialize it into C# Objects in our Server app, then I have to make a choice of how to store it on the SQL Database...
Should I use Varbinary Data type? Then Deserialize it when updates occur in the User APPS?

Update: For now I will use XML as my message payload to make it easier to read when debugging and testing, then when the project is just nearing completion, I will try to switch it to binary and marshal/ un-marshal data on both sides as I think there may be some performance advantages to this.