Mike Shaw just sent me a link to a cool utility that Mitch Milam wrote that helps you auto populate pick lists much fast than you can do this by hand. Of course, he shows me this after he spent some time manually inserting picklists for a couple of days. :-) My understanding is that modification of the XML file outside of the CRM UI is not supported, so you need to use this at your own risk.

Utility to generate picklist options for Dynamics CRM 3.0