1. A method used for managing XML data in a database system, comprising the steps of: a database server receiving a XML schema; wherein said XML schema includes a plurality of XML schema declarations, wherein a particular declaration of said plurality of XML schema declarations defines a particular collection element; based on said particular declaration of said plurality of XML schema declarations that defines said particular collection element, determining a database representation for storing said particular collection element in a database of the database server; said database server making a certain determination of whether to store the particular collection element as an in-line VARRAY column or an out-of-line VARRAY column based on one or more factors, wherein said one or more factors includes a database type of the database representation determined for storing the particular collection element; wherein the one or more factors are based on forms of VARRAY storage supported by said database server for the database type; and said database server generating mapping data that maps said particular collection element to a form of VARRAY storage determined by said certain determination.