Getting started with XSD validation with .NET

Rather than using the XDocument.Validate extension method, I would use an XmlReader which can be configured to process an inline schema via XmlReaderSettings. You could do some thing like the following code.

public void VerifyXmlFile(string path)
{
    // configure the xmlreader validation to use inline schema.
    XmlReaderSettings config = new XmlReaderSettings();
    config.ValidationType = ValidationType.Schema;
    config.ValidationFlags |= XmlSchemaValidationFlags.ReportValidationWarnings;
    config.ValidationFlags |= XmlSchemaValidationFlags.ProcessInlineSchema;
    config.ValidationFlags |= XmlSchemaValidationFlags.ProcessSchemaLocation;
    config.ValidationEventHandler += new ValidationEventHandler(ValidationCallBack);

    // Get the XmlReader object with the configured settings.
    XmlReader reader = XmlReader.Create(path, config);

    // Parsing the file will cause the validation to occur.
    while (reader.Read()) ;

}

private void ValidationCallBack(object sender, ValidationEventArgs vea)
{
    if (vea.Severity == XmlSeverityType.Warning)
        Console.WriteLine(
            "\tWarning: Matching schema not found.  No validation occurred. {0}",
            vea.Message);
    else
        Console.WriteLine("\tValidation error: {0}", vea.Message);

}

The code above assumes the following using statements.

using System.Xml;
using System.Xml.Schema;

Just to keep this simple I did not return a boolean or a collection of validation errors, you could easily modify this to do so.

Note: I modified your config.xml and config.xsd to get them to validate. These are the changes I made.

config.xsd:

<xs:element maxOccurs="unbounded" name="levelVariant">

config.xml:

<config xmlns:xsi="http://www.w3.org/2001/XMLSchema-instance" xsi:noNamespaceSchemaLocation="config.xsd">

Following is out of a working sample:

Usage:

XMLValidator val = new XMLValidator();
if (!val.IsValidXml(File.ReadAllText(@"d:\Test2.xml"), @"D:\Test2.xsd"))
   MessageBox.Show(val.Errors);

Class:

public class CXmlValidator
{
    private int nErrors = 0;
    private string strErrorMsg = string.Empty;
    public string Errors { get { return strErrorMsg; } }
    public void ValidationHandler(object sender, ValidationEventArgs args)
    {
        nErrors++;
        strErrorMsg = strErrorMsg + args.Message + "\r\n";
    }

    public bool IsValidXml(string strXml/*xml in text*/, string strXsdLocation /*Xsd location*/)
    {
        bool bStatus = false;
        try
        {
            // Declare local objects
            XmlTextReader xtrReader = new XmlTextReader(strXsdLocation);
            XmlSchemaCollection xcSchemaCollection = new XmlSchemaCollection();
            xcSchemaCollection.Add(null/*add your namespace string*/, xtrReader);//Add multiple schemas if you want.

            XmlValidatingReader vrValidator = new XmlValidatingReader(strXml, XmlNodeType.Document, null);
            vrValidator.Schemas.Add(xcSchemaCollection);

            // Add validation event handler
            vrValidator.ValidationType = ValidationType.Schema;
            vrValidator.ValidationEventHandler += new ValidationEventHandler(ValidationHandler);

            //Actual validation, read conforming the schema.
            while (vrValidator.Read()) ;

            vrValidator.Close();//Cleanup

            //Exception if error.
            if (nErrors > 0) { throw new Exception(strErrorMsg); }
            else { bStatus = true; }//Success
        }
        catch (Exception error) { bStatus = false; }

        return bStatus;
    }
}

The above code validates following xml(code3) against xsd(code4).

<!--CODE 3 - TEST1.XML-->
<address xmlns:xsi="http://www.w3.org/2001/XMLSchema-instance" xsi:noNamespaceSchemaLocation="Test1.xsd"> 
<name>My Name</name>
<street>1, My Street Address</street>
<city>Far</city>
<country>Mali</country>
</address>

<!--CODE 4 - TEST1.XSD-->
<xs:schema xmlns:xs="http://www.w3.org/2001/XMLSchema">
<xs:element name="address">
<xs:complexType>
<xs:sequence>
<xs:element name="name" type="xs:string"/>
<xs:element name="street" type="xs:string"/>
<xs:element name="city" type="xs:string"/>
<xs:element name="country" type="xs:string"/>
</xs:sequence>
</xs:complexType>
</xs:element>
</xs:schema>

In validating against your xml/xsd I get of errors different than yours; I think this can help you continue(add/remove xml elements) from here:

You may also try the reverse process; try generating the schema from your xml and compare with your actual xsd - see the difference; and the easiest way to do that is to use generate schema using VS IDE. Following is how you'd do that:

Hope this helps.

--EDIT--

This is upon John's request, please see updated code using non deprecated methods:

public bool IsValidXmlEx(string strXmlLocation, string strXsdLocation)
{
    bool bStatus = false;
    try
    {
        // Declare local objects
        XmlReaderSettings rs = new XmlReaderSettings();
        rs.ValidationType = ValidationType.Schema;
        rs.ValidationFlags |= XmlSchemaValidationFlags.ProcessSchemaLocation | XmlSchemaValidationFlags.ReportValidationWarnings;
        rs.ValidationEventHandler += new ValidationEventHandler(rs_ValidationEventHandler);
        rs.Schemas.Add(null, XmlReader.Create(strXsdLocation));

        using (XmlReader xmlValidatingReader = XmlReader.Create(strXmlLocation, rs))
        { while (xmlValidatingReader.Read()) { } }

        ////Exception if error.
        if (nErrors > 0) { throw new Exception(strErrorMsg); }
        else { bStatus = true; }//Success
    }
    catch (Exception error) { bStatus = false; }

    return bStatus;
}

void rs_ValidationEventHandler(object sender, ValidationEventArgs e)
{
    if (e.Severity == XmlSeverityType.Warning) strErrorMsg += "WARNING: " + Environment.NewLine;
    else strErrorMsg += "ERROR: " + Environment.NewLine;
    nErrors++;
    strErrorMsg = strErrorMsg + e.Exception.Message + "\r\n";
}

Usage:

if (!val.IsValidXmlEx(@"d:\Test2.xml", @"D:\Test2.xsd"))
                MessageBox.Show(val.Errors);
            else
                MessageBox.Show("Success");

Test2.XML

<?xml version="1.0" encoding="utf-8" ?>
<config xmlns:xsi="http://www.w3.org/2001/XMLSchema-instance" xsi:noNamespaceSchemaLocation="Test2.xsd">
  <levelVariant>
    <filePath>SampleVariant</filePath>
  </levelVariant>
  <levelVariant>
    <filePath>LegendaryMode</filePath>
  </levelVariant>
  <levelVariant>
    <filePath>AmazingMode</filePath>
  </levelVariant>
</config>

Test2.XSD (Generated from VS IDE)

<?xml version="1.0" encoding="utf-8" ?>
<xs:schema xmlns:xs="http://www.w3.org/2001/XMLSchema" elementFormDefault="qualified">
  <xs:element name="config">
    <xs:complexType>
      <xs:sequence>
        <xs:element maxOccurs="unbounded" name="levelVariant">
          <xs:complexType>
            <xs:sequence>
              <xs:element name="filePath" type="xs:anyURI">
              </xs:element>
            </xs:sequence>
          </xs:complexType>
        </xs:element>
      </xs:sequence>
    </xs:complexType>
  </xs:element>
</xs:schema>

This is guaranteed to work!