I just ran across a bug in Drupal that was drastically affecting my XML Sitemap listings.  The bug made it so my blog posts were listed as node/{number} in my sitemap rather than the path auto path.  After much searching it looks like the module weight on XML Sitemap was set to 2 so it was checking the nodes path before path-auto was setting the path alias.

At this point there's two ways to fix it, either you can hack the database directly to change the weight for XML Sitemap Node or you can download the module called Module Weight.  I decided to try out the module weight... umm... module and it worked like a charm.  On the module page I updated the XML Sitemap Node modules weight to 10 and my sitemap was then properly fixed!

So if you see node/#### in your sitemap  and you know you have a alias already defined for that node than this is the fix for you.