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It's more of a universal way to communicate through programming languages. You can parse XML with a PHP object and get information from it. If you are making an application for your own server, I would just use a database, sessions, or cookies to store your information, but many other services use XML to communicate, so it's important to know how to generate and parse it.
I was thinking the same thing as you for a while, and I don't use it unless I absolutely have to (I have to send credit card requests in XML format to the credit card terminal I use--that's the only time I use it).
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