Do you generate the site-map XML file or is there an easier way to manage and place my own XML file?

In general, the sitemap.xml is automatically generated. But you can manually override it in the Site Settings --> SEO/HTML --> Sitemap.xml Override area. If you want to override the automatic sitemap.xml, the contents you put in this area must be a valid site map XML format (  

After you clear out the "", be sure to click save. Then you will want to clear site cache. You can read about how to do that here: Custom skin changes are taking too long to show up on my site?