jeff:disqus devin$ wc settings.py settings.xml
       1      15     142 settings.py
      16      19     461 settings.xml
      17      34     603 total

30% of the words. and, in my opinion, just as readable if not more.

Or with a little less clutter :-)

  <backup>
    <dir name="/media/programming" exclude="log_files temp_files" />
    <dir name="/media/documents" exclude="archive" />
  </backup>

i'd probably define some helper functions to check argument values and such:

  config = backup(
    directory('/media/programming', exclude=['log_files', 'temp_files']),
    directory('/media/documents', exclude='archive')
  )

Yeah, I've done that as well.

Are there any security considerations to think about if using that approach?

well. it's mutable. your code can change it. don't do it (often). then you're just programming with lots of global state.