XML means EXtensible Markup Language
It's a self-descriptive language, designed to carry your data. The tags you have to use for describing data are not predefined - you can choose whatever name you find siutable.. But your application also must be able to parse your xml (which means to "understand" your tags).
XML is the language used to describe data in the query responses (you app makes a query and requests some data form your server, that responses to its request by sending some messages (http or whatever) back to it).

Look here for a good tutorial XML Introduction - What is XML?


And why do you need XML for ? :)