Crunchy Cat explains it one way, however some might be a little confused, for those few and explaination is that XML is a "Markup Language". This means it contains information that has added "containers" (Brackets a bit like HTML or even bbcode) that aid in identifying what information exists within the container. The XML sheet can then be interpreted and the information filtered/converted into different outputs, such as populating blog outputs, or webpages amongst other things. (It's also used in UPnP [Universal Plug and Play] as it identifies the peripherals on the network) I personally haven't used it much, however I will likely use it for "feed" data or where you might have different skins applied.
It didn't look like John was asking what XML is but rather what members of the site use it for. I simply listed my top 3.
I used it during my internship. We were developing an extensible diagnostic platform for vehicle monitoring, and we used XML files to describe the algorithms that were dynamically loaded by the system at runtime. I've also used it for enterprise java beans, for all of the descriptor files that are necessary.
Thanks for the responses. I see the files with databases i have been using and though it was used to execute commands by itself.