Yes, the PREL (Project file) is XML.
I have never used any form of version control, but instead do a series of Saves. There are three main, active Saves, such as Save, Save_As and Save_A_a_Copy. Each is similar, though each has differences. Next, there is the AutoSave, which automatically kicks in, and will do Saves, into the AutoSave folder with the Project. This one is FIFO, and will overwrite previous AudioSaves, per the number set in Edit>Preferences (default = five). This ARTICLE goes into more detail on the differences and similarities of the various Saves.
Even with major Projects, like the 10 hour opus, that I have been working on for over 3 years, I have not felt the need to look beyond my Save_As and Save_As_a_Copy files. However, I can imagine instances, where such version control would be very useful.
Good luck, and if you find a good method, please post the details, as they may well help others in the future.
Having compared files after even a small change there doesn't seem much point putting them in version control, they change so much even after small alterations.
Thank you for sharing that observation. I had not monitored how the PREL (or the PRPROJ in PrPro) changes. Good point.