XML, which stands for Extensible Markup Language, is a language similar to HTML used for creating arbitrarily-structured documents and web pages. The language is a filtered version of SGML, Standard Generalized Mark-Up Language, but more suited for web delivery with less overhead common with SGML. Unlike HTML, XML specifies no pre-defined tags. Instead, the semantics of an XML document are defined by the applications that process them.
XML files are written in ASCII text, so the information contained within an XML document is exchangeable between otherwise incompatible systems. Although commonly associated with the Internet, XML is not necessarily limited to such. Since it's main objective is the organization of data, data exchange between different systems (within a single company) may be easily implemented by passing XML documents.
The syntax of XML is completely ambiguous and really cannot be standardized. The authors and clients of the documents must determine how their information is to be stored and standardize it amongst themselves. It is a tagged language, much like HTML, however the tags are not pre-defined. Instead, they are created based on the information contained within the tags.
Since it is a text file, it can be viewed in any text editor. In order to view an XML document's structure (especially when it comes to large, repetitive documents), you'll need an XML parser. This parser will read the XML document and display it in an organized fashion creating collapsing and expanding branches. If the XML document is to be viewed over the Internet, the document must first be converted into HTML through XSL. XSL (Extensible Style Language) is similar to HTML's style sheets in that it provides a set of rules based on the XML document's tags to be converted to HTML.
XML's biggest area of application is the organization of data within an intranet. Companies who have standardized ways of exchanging information (either from company to client or within the company) will benefit from XML's ambiguously-structured document format.