Since the UI appearance is controlled via XML documents, is it possible to create custom interactive menus like the class selection menu or inventory menu? I understand that you can use MessageBox to make menus, but that is horribly roundabout, user-unfriendly, and ugly.

please expand on what you mean by interactive class selection and inventory menus

I am essentially asking if it is possible to make a new type of menu call that would bring up a window in which you could have a few panes with separators or groups. In the class selection menu, for instance, you have a list of buttons - the classes - on the left with a vertical separator then a pane with the hovered class' information - class image, class description, and targeted skills - then you have two buttons on the bottom for "Okay" and "Back". For the inventory screen, you a long list of buttons that represent your inventory which has been stylized and justified to show you the name, weight, gold amount, and quantity which is then all separated into object groups like Miscellaneous, Ammunition, Weapons, Armor, and Potions.

So, what I meant was, is it possible to recreate that using the styling of the original XML files into a completely separate menu or am I simply stuck with the old and unfriendly MessageBox which has absolutely no styling abilities at all?

Are you talking like the old WZ_inventory so it looks like Marrowind Inventory type. If not, There are options but at this time I dont know if it is possible to seperate the inventory out like you are suggesting. Menu Q is comming along and allowing for more options then modders had in the past.

Actually, I do not mean separating the inventory or really anything to do with it. I mean creating a completely new interface component where you can add buttons that are images, collapsible content, or scrollable panes.

An example that I can think of would be adding a crafting system similar to the potion-making system of pressing the slots (buttons) which brings up an inventory screen of only ingredients showing what they each do, selecting an ingredient, changing the selected slot's image to the icon of the ingredient, etc.

Obviously, the above example can be just as easily created through MessageBoxes and just checking whether or not the player has the requisite items in his inventory like in Fallout 3. However, such a method is so impersonal and not immersive.

Ok I think I am following what you are trying to do. If so then that should be possible with out changing the Interface to much.
It would be just adding buttons to say bring up:
1 if player has a Hammer
2 if player does then repair screen comes up.
(Heck it should be possible to have say a button with a hammer and then beside it a number for how many you have so that would make the set up a little bit easier.)

It would be just adding buttons to say bring up: this one is a little bit more difficult
1 if player has any of the Alchemy equipment
2 if player does then potion making screen comes up.

same with recharging Items with Soul gems
but that one is even harder to would require a second screen change to say select soul levels petty common and so on. it is more difficult because you have the different soul gems them selves as well as the soul level.

Once again I dont think it is impossible you could do it with out changing the current inventory layout Just a matter of adding buttons to say top and bottom.
You should ask I believe Kyroma, DarN, showler of maybe Arkngt. They would be some of the better ones to ask about this. seeing as how they work On the DarN standard and DarkUI's The last two might be able to help for answering your questions the first two Should be able to tell you one way or the other.
I would, figure out what exactly you want it to look like so you can tell them with out having them guess at what you are trying to accomplish.

Edit I don't remember but you were talking like you wanted Items of a particular ability IE Damage Health to come up, I think but not sure that they have sorters for on person ingredients for when you do alchemy. I would look at that as well. If I remember correctly that was done by OBSE Scripting in the CS.