Sorry, that lost something in translation from my data to Torch's data (and ended up as complete nonsense!) Kristen is absolutely right, it was meant to be:
SELECT
1 AS tag,
NULL AS parent,
NULL AS [Stages!1],
NULL AS [Stage!2!StageID],
NULL AS [Stage!2!Stage],
NULL AS [Stage!2!Update]
UNION
SELECT
2 AS tag,
1 AS parent,
NULL AS [Stages!1],
s.[StageID] AS [Stage!2!StageID],
s.[Stage] AS [Stage!2!Stage],
s.[Update] AS [Stage!2!Update]
FROM
Stages AS s
FOR XML EXPLICIT
Mark