Where should I use XML?

Its goal is to enable generic SGML to be served, received, and processed on the Web in the way that is now possible with HTML. XML has been designed for ease of implementation and for interoperability with both SGML and HTML.
Despite early attempts, browsers never allowed other SGML, only HTML (although there were plugins), and they allowed it (even encouraged it) to be corrupted or broken, which held development back for over a decade by making it impossible to program for it reliably. XML fixes that by making it compulsory to stick to the rules, and by making the rules much simpler than SGML.
But XML is not just for Web pages: in fact it's very rarely used for Web pages on its own because browsers still don't provide reliable support for formatting and transforming it. Common uses for XML include:
Information identification
because you can define your own markup, you can define meaningful names for all your information items. Information storage
because XML is portable and non-proprietary, it can be used to store textual information across any platform. Because it is backed by an international standard, it will remain accessible and processable as a data format. Information structure
XML can therefore be used to store and identify any kind of (hierarchical) information structure, especially for long, deep, or complex document sets or data sources, making it ideal for an information-management back-end to serving the Web. This is its most common Web application, with a transformation system to serve it as HTML until such time as browsers are able to handle XML consistently. Publishing
The original goal of XML as defined in the quotation at the start of this section. Combining the three previous topics (identity, storage, structure) means it is possible to get all the benefits of robust document management and control (with XML) and publish to the Web (as HTML) as well as to paper (as PDF) and to other formats (eg Braille, Audio, etc) from a single source document by using the appropriate stylesheets. Messaging and data transfer
XML is also very heavily used for enclosing or encapsulating information in order to pass it between different computing systems which would otherwise be unable to communicate. By providing a lingua franca for data identity and structure, it provides a common envelope for inter-process communication (messaging). Web services
Building on all of these, as well as its use in browsers, machine-processable data can be exchanged between consenting systems, where before it was only comprehensible by humans (HTML). Weather services, e-commerce sites, blog newsfeeds, AJaX sites, and thousands of other data-exchange services use XML for data management and transmission, and the web browser for display and interaction.