There are many applications for which XML as a native data format - is not the right answer. For data interchange applications however, XML is nearly always the right answer. It depends on your needs. If you apps are well served by, for example, the relational model, there is no benefit to be gained from XML databases.
There are many apps that are better suited to XML modelling. They are easily spotted. They are the ones that involve severe data contortions to fit the data into the relational model.
Data-oriented applications aside, XML is *great* for modelling documents that have irregular, nested and recursive structures. The tree structure XML is based on is a good fit with a lot of eContent applications and gives content owners an alternative to proprietary encodings.
So in summary, for database type applications, XML is often not necessary or even helpful in the core but is very useful for data interchange. For document type applications, XML is, more often than not, exactly what you need.
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