InfoPath Dev

I am building a solution that needs to allow a user to search for values in specified fields (defined in an xsd). The initial form is essentially the xsd document. When the user fills in at least one field and hits submit, a web service needs to be called which will parse through the document and query a database for matching records.

The matching records will be returned in an xml document. The form then needs to display a list of matches. When the user clicks on a match, a populated form should be displayed which allows the user to modify values for the record and then submit them to yet another web service that will persist the record back to the database.

Does InfoPath have the capability to do this, and if so, has anyone seen a good sample of it?

Yes, InfoPath allow you to do this.
In the beginning:
1) Create Secondary Data Source from xml file
2) Try to write web-service, wich return to you form data in xml (same structure as xml file of Secondary Data Source)...
3) Use some control (for example List) to view this data

When you get this, we`ll talk about the rest :)