Why are they in .mesh format? is it possible to replace them with an .xml like the soldiers?

*.mesh is the binary ogre geometry model format, which can't be edited. Ogre can not load xml geometries. The soldier and weapon models are different as they are made of voxels.

It is possible, all items/weapons/grenades/projectiles can be either regular polygonal meshes (.mesh) or voxels (.xml). Soldiers as such are a bit different because of animations, only voxels are supported.