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I am also having the same problem (but without the offer to rebuild the database).


From Console:

5/21/08 8:48:33 AM OmniFocus[497] Exception reading XML: Unable to parse XML (status=10, index=1, line=1, error=Encountered unexpected character 0x0 ('') at top-level)
5/21/08 8:48:33 AM OmniFocus[497] Presenting modal error: Error Domain=com.omnigroup.OmniFocus Code=2129 UserInfo=0x164527b0 "Unable to read document." {
NSLocalizedDescription = "Unable to read document.";
NSLocalizedRecoverySuggestion = "Error occurred while reading document from '/Users/XXXXXX/Library/Application Support/OmniFocus/OmniFocus.ofocus/4407ED8D-294B-4508-A129-CBB6D0E0B1CB:FE7CD4E9-DCEC-4947-9B8D-35B733D2C672.xml'. Check the console for a more detailed error.";
"com.omnigroup.framework.OmniBase.ErrorDomain.File LineAndNumber" = "/Volumes/Disk/Users/Shared/kc/ReleaseProduct/Source/OmniGroup/Applications/Focus/App/XML/XMLImporter.m:99";
}