Yes, you generally have to restart the app whenever it involves re-reading xml.
However, if you run the store in debug mode during development, you can avoid this.
Dave will have to comment on whether this will work in the related products template. I just recall that it was unable to process allsorts of things when I first made these templates and I wanted to add things in that it couldn't handle. I think it was something to do with where it was called in the rendering process.
Rob