Satish,
You don’t need to mess with the catalog. Just make sure your URL to the schema (from the XML) is valid, the editor will load it up (either locally or remotely) and validate it for you.
TIP: If the schema and XML are in the same directory, you don’t need to include a path for the schema in the XML file, you can just give it’s name. Default behavior of the validating parser is to then load it from the same dir as the XML file. You’ll notice in most files, this location is some remote locaiton like http://www.sun.com/schemas/web_2.4.xml or something like that, this way it is *universally* accessible. In the case where you work offline and don’t have net access, you WOULD use the catalog to register a local copy of that schema so the editor didn’t throw an exception when it tried to load the remote file and failed.