My feeling is that the big point of XML is its homogenous nature. By storing data in an XML database you instantly ensure that it will be orders of magnitude easier to access it from any device (small PDA to big blue) ... and so in this age that is a big issue.
By using an XML database one ensures that a single XML library - e.g. Xerces that any device can retrieve data from a database. Lets face it... Oracle bindings for PDAs!? In addition to this XML is plain text and therefore transportable over traditional protocols such as HTTP without further drivers.
Some might argue that using XML for databases is overkill and a waste of space... However I need only point to the falling cost of storage space and processing power.
Granted for large databases it will be the case that indexing over and XML file could become prohibitive - particularly due to the ability of the user to arbitrarily modify data. As such it may be the case that an XML interface should be provided to a database backed by an Object-Oriented database (the semantics of the Relational Model finds it increasingly hard to capture deeply structured XML). Its just such a shame Google opted for a SOAP API rather than pure XML for remote access :(
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