Simple, rather reliable way... open the .XLS and do a Save As from Excel as "CSV (Comma Delimited)", "Formatted Text" or "Text (Tab Delimited)" file types, depending on which is more appropriate for your situation.
Then you can use that file pretty much as easily as your other txt files. Using them with the Merant Text Driver (pre-MX) is an great solution... though it doesn't provide UPDATE capability.
The harder, less reliable way... use one of the Custom Tags that have been built to read .XLS files directly as a "native" data source. I say this is harder and less reliable because it seems your set-up has to be absolutely perfect (ie - exactly like the set-up that the developer developed it on) for it to work. If you have a different version of Excel, a different OS service pack, or if the moon and stars are even slightly mis-aligned, you won't get very far.
There are free versions on Macromedia's developer exchange, I'm pretty sure, and commercial versions (just do a web search).
Also, all the ones I've seen only run on a Windows server.
-Carl