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How to go about reading and utilizing .osm xml data...

I would like to know if it is possible to create a plugin that allows the importing of OpenStreetMap .osm xml data and uses a custom class to sort through the nodes to create a network of roads and or landmarks that I then can attach road meshes, etc – is this possible?
Perhaps I can utilize a sqlite connection and just read the table data that I bring into sqlite from the .osm file?

There is an XmlParser in the Engine that you could use to load the map files. The other stuff should be possible too, depending on what scale you want to go for.