jQuery Grid Plugin - jqGrid

I am still trying to understand how jqGrid works. I have managed to load data into my grid from the server, and I've managed to get it to sort, but I can't get the paging to work. What I would like is to download all the data from the server at once, but only have some of it displayed in the grid. Then I would like to be able to sort the data in the grid and also page forwards and backwards. Is this possible? It looks as if I have to use the loadComplete function to change the datatype to "local" or the sorting won't work (it keeps trying to go back to the server), but then clicking the paging buttons just resorts the data instead of paging.

Maybe I am missing something simple? Thank you very much for your help! Here is my Javascript:

          jQuery("#list").jqGrid({

            url:MyURL,
            datatype: 'xml',
            loadComplete : function () {
               jQuery("#list").jqGrid('setGridParam',{datatype:'local'});
            },
            mtype: 'GET',
            colNames:['Inv No','Amount','Tax','Notes'],
            colModel :[
              {name:'invid', index:'invid', width:100},
              {name:'amount', index:'amount', width:80, align:'right'},
              {name:'tax', index:'tax', width:80, align:'right'},
              {name:'note', index:'note', width:150, sortable:true}
            ],
            pager: $('#pager'),
            rowNum:3,
            rowList:[3,6,9],
            sortname: 'invid',
            sortorder: 'desc',
            viewrecords: true,
            caption: 'My first grid'
          })

and here is the XML (total of 7 rows):

<?xml version='1.0' encoding='utf-8'?>
<rows>
<page>1</page>
<total>1</total>
<records>2</records>
<row id='1'>
<cell>101</cell>
<cell>500.00</cell>
<cell>15.00</cell>
<cell>Testing</cell>
</row>
...
<row id='7'>
<cell>107</cell>
<cell>700.00</cell>
<cell>70.00</cell>
<cell>Testing7</cell>
</row>
</rows>