XML stands for extensible markup language. It is used primarily as a format-independent way to describe and exchange data over the Internet.
Like HTML, XML is a descriptive language. Unlike HTML, however, the grammar of the language is created by the author and is specific for each application. For example, the XML markup of data relating to a shipping record is different from the XML used on an Allbusiness.com Web page.
XML is used extensively by Web applications that need to exchange structured data with other Web applications because of its ability to provide a standard way to "describe" the data in a way that the receiving application knows what to do with it. As a result, XML is platform-independent and allows you to exchange information among different hardware, databases, and software.
More and more applications are using XML as their data description language. Microsoft recently announced that they would be using XML as the data format for Word and Excel documents, which will allow other applications to easily access data within these documents.