Используйте перегрузку Save (), которая принимает XmlWriter , и настройте XmlWriter, используя экземпляр XmlWriterSettings . Например
XmlWriterSettings settings = new XmlWriterSettings();
settings.Indent = true;
settings.IndentChars = " ";
settings.NewLineOnAttributes = true;
//Using XmlWriter to create xml file.
using (XmlWriter writer = XmlWriter.Create("some-file.xml",settings))
{
doc.Save(writer)
}