Inline Schema - XML Source

I have a serialized XML that I got from a dataset. In my 'Data Flow Task', I bind the 'XML Source' source to this XML file. Since the XML file is having the schema along with it, I check the 'Use Inline schema' option. However, when I put a dataviewer to see the rows getting sent to the destination, I see that no rows are getting transfered. As you will see from the XML file I am trying to use, I do have one row to transfer.

I tried kepping the schema file and the content file separate and that worked. I am not sure if there are any inherent issues I need to take care of, when using inline schemas to transfer data. I have the SP2 for SQL 2005 installed.

Here is the XML file content:

<?xml version="1.0"?>
<DataSet>
<xs:schema attributeFormDefault="unqualified" elementFormDefault="qualified" xmlns:xs="http://www.w3.org/2001/XMLSchema">
  <xs:element name="NewDataSet">
    <xs:complexType>
      <xs:sequence>
        <xs:element minOccurs="0" maxOccurs="unbounded" name="Table1">
          <xs:complexType>
            <xs:sequence>
              <xs:element minOccurs="0" name="LastName" type="xs:string" />
              <xs:element minOccurs="0" name="FirstName" type="xs:string" />
              <xs:element minOccurs="0" name="Descr" type="xs:string" />
            </xs:sequence>
          </xs:complexType>
        </xs:element>
      </xs:sequence>
    </xs:complexType>
  </xs:element>
</xs:schema>
<NewDataSet>
<Table1>
<LastName>Agrawal</LastName>
<FirstName>Sumeet</FirstName>
<Descr>Consultant 1</Descr>
</Table1>
</NewDataSet>
</DataSet>

Thanks,

Sumeet