To me, this is rather ugly because it messes up the indentation of some_func(). Suppose we could have a multiline string, that when started on a line indented four spaces, ignores the first four spaces on each line of the literal when creating the actual string?
In this example, I will use four quotes to start such a string. I think the syntax for this could vary though. It would be something like this:
def some_func():
x, y = process_something()
val = """"
<xml>
<myThing>
<val>%s</val>
<otherVal>%s</otherVal>
</myThing>
</xml>
"""" % (x, y)
return val
That way, the indentation in the function would be preserved, making everything easy to scan, and the indentation in the output would not suffer.