Coding a parser for a domain specific language in Java

Take a look at Xtext - it will take a grammar definition and generate a parser as well as a fully-featured eclipse editor pluging with syntax highlighting and -checking.

You could try JavaCC or Antlr for creating a parser for your domain specific language. If the editors of that file are not programmers, I would prefer this approach over XML.

ANTLR should suffice

ANTLR, ANother Tool for Language Recognition, is a language tool that provides a framework for constructing recognizers, interpreters, compilers, and translators from grammatical descriptions containing actions in a variety of target languages. ANTLR provides excellent support for tree construction, tree walking, translation, error recovery, and error reporting.