You can do either. If you have a spare HD and don't want to reflash you FW just to remove icons, put your spare drive in and play around with the XML until you get it right. You won't hurt anything and the worst that could happen would be that you would have to go into recovery mode to reformat the drive. If you are on a CFW now, and want to use the MFW tool, I would recommend that you flash back to the OFW via the recovery menu and the flash your MFW back over again via Recovery. Either option will allow you to clean out unwanted icons.