XML in movie clip
Is it possible to load the txeff and text container in a movie clip. If so, what would the path be in the XML file to load the content?

Not the same
The path to the xml file and the TxEff's path inside the clip are two different things. You need to set the xmlPath property of the component to the path and filename of the xml file (or url).

Multiple lines of text
In the thread http://www.jumpeyecomponents.com/knowledgebase/TxEff-AS3.0/Apply-transitions-on-multiple-text-from-xml-file~373/

Can you use this example and the example on the the thread above to make multiple lines of text have their own transitions.

Multiple lines of text
The setup XML file for the TxEff component has a unique structure which you cannot change. If you would like to apply a different transition to each text, then you need a different setup .xml file for each transition and apply it to the TxEff component. Also, if you would like to have a dynamic slide show with different texts from a separate .xml file, you could combine the two examples: you can specify in the .xml file containing the list of texts, the corresponding setup .xml file for each transition.