Go into your document  library settings and under advance settings just enable
browser documents to be displayed as a web page.

I already had the settings "Display as Web Page"
for the document  library. It is working properly when we go to the
list and open  any existing/new form, by displaying it in browser. But
when I search  for the document in the document library  and click on
any xml  file returned by the search, it is prompting for open or save
the infopath  form. I want the searched form  to be open in browser  when
I click on the search result xml file. Please provide me some solution
for this.

Have you set the "document library" setting to "dispaly in browser". Open
the setting of the document  library and I think it is under advanced
settings.

Perhaps this will address your issue.

here is the answer, it works really fine for me: phillyxaml.org/blog/Lists/Posts/Post.aspx?ID=41

the subject is modify the XSLT Applied to the Search Results