Many folks say it's much more than that. But there's a lot of [hype and uncertainty] around most things XML. It's hard to see clearly thru the fog.
The dream of XML is to unite data formats under one umbrella. One example of this would be to have all word processors using a single document format - wouldn't matter which one you used because they'd all be able to read each others documents. The ultimate goal of course, as always, is to acheive the genuine PaperLessOffice?.
The reality is, of course, hampered by HumanNature?.
In basic usage you can have an XML file, 'marry' it with a stylesheet (either XSLT or CSS) and you have a web page which can be viewed in the main web browsers. At a more advanced level you can do just about whatever you want with the data contained within the XML.
Personally I am an XmlJunkie?. I have used it to create an webpage voting system and a simple document processing system. I have utilised it in converting [AbiWord] documents into PDF and within a meta news search engine.
At the moment the most popular usage for XML on the web is HeadlineSyndication. It is also used for WebAnnotation (AnnoteaProject) and InstantMessaging, ([Jabber]). [Google] and [Amazon] use it in their API's to allow developers to directly access search results and product database respectively.