An easy way to create the tags without having the extra namespace and xsi:nil="true" in the tag is to simply use the ISNULL function:
SELECT EmployeeID as "@EmpID",
ISNULL(FirstName,'') as "EmpName/First",
ISNULL(MiddleName,'') as "EmpName/Middle",
ISNULL(LastName,'') as "EmpName/Last"
FROM HumanResources.Employee E, Person.Contact C
WHERE E.EmployeeID = C.ContactID
AND E.EmployeeID=1
FOR XML PATH, ELEMENTS
returuns the folowing xml
<row EmpID="1">
<EmpName>
<First>Gustavo</First>
<Middle></Middle>
<Last>Achong</Last>
</EmpName>
</row>