The main advantage of using XML in this situation is that you remove the dependency on having the same software stack at both ends of the link.
I came across a client who was exchanging data with a key provider, creating a daily image of his SQL server database at one end and restoring it at the other. Consequences: Neither side could upgrade to the new SQL Server unless the other side upgraded on the same day.
In addition, as O'Connor mentioned, XML makes it relatively painless to expand the content of a message when requirements change, without having to make the change at the same time.
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