Is the JHD12864E compatible with an Arduino board

The 3.3V will be recognised as a high-level by TTL logic. You will need 5V to power the LCD, however.

EDIT

From the Spartan-3E User Guide:

The character LCD is power by +5V. The FPGA I/O signals are powered by 3.3V. However, the FPGA’s output levels are recognized as valid Low or High logic levels by the LCD. The LCD controller accepts 5V TTL signal levels and the 3.3V LVCMOS outputs provided by the FPGA meet the 5V TTL voltage level requirements.

The 390Ω series resistors on the data lines prevent overstressing on the FPGA and StrataFlash I/O pins when the character LCD drives a High logic value. The character LCD drives the data lines when LCD_RW is High. Most applications treat the LCD as a writeonly peripheral and never read from from the display.

I'm assuming that you can already read the string into a buffer so I will start at the buffer. Your code should go something like this (you will need to import the string library):

String wholeString = String(yourLoadedCharBuffer);
int startTag = wholeString.indexOf("<co2>");
int endTag = wholeString.indexOf("</co2>");

String co2FullString = wholeString.substring(startTag+5,endTag-1);

This gives us "5.2527637e2", you add 5 to the start tag because it is 4 characters long and you want to start at the "5", and you subtract 1 from the endtag, because we don't want the first character of it.

int eStart = co2FullString.indexOf("e");
String decimalString = co2FullString.substring(0,eStart-1);
String powerString = co2FullString.substring(estart+1, co2FullString.length-1);

char decimalCharArray[] = decimalString.toCharArray();
char powerCharArray[] = powerString.toCharArray();

float decimal = atof(&decimalCharArray[0]);
float power = atof(&powerCharArray[0]);

float finalCO2Value = pow(decimal,power);