There is definitely a coniflict with these two plug ins.
XML Sitemaps will not create a sitemap while Simple Tags is activated.
Need to deactivate simple tags to create sitemap.
Please note i run a big site of 2,684 posts and 1,646 tags but this was running happily until the 25th of July.
I'm running php 5.25 so someone elses suggestion that it was fixed by running php 5.x is wrong