Add in civx.Maybe I'm unusual here, but I don't see why you would want to mod that way for anything other than "add in civ x" type mods. IMO big mods should edit copies of the original files in the mod's folder.
Change civx.
Add in unitx.
Change unitx.
Change game rules (like tech spread, etc).
My personal mod adds a bunch of new animals, changes a bunch of unit balance, etc. Having a complete copy of an XML file that includes things I don't change seems like a bad idea to me -- no need for redundant data, because if it changes, I'll have to support it.
Instead, I support changes only to the units/rules/etc I change, and use the "upstream" mod (in my case, BetterAI) for everything else. If we both change something and I don't notice their change, I override theirs silently (which is less than ideal, but what can you do!).
Now, if you are reaching the point where you completely rebuild the tech tree, this isn't practical.
But even there, you can do things like keep individual units as mini-mods that you patch together into a full mod. This only works to a limited extent, because civ4s modular XML loading still has issues, but ...