XML (eXtensible Markup Language) is a standard way of storing data. It became a W3C recommendation in 1998.
If you aren't on the XML bandwagon yet, you should be. XML is a good thing and it makes software better.
XML is confusing at first, but it is worth the time spent understanding it.
I found a great resource that explains XML concisely, quickly and with many examples.
Here is the section I read to understand the XML format (.xml files).
After that, I read this section about how to "design" an XML file format using XML schema (.xsd files).
In less than a day, I have learned a lot about XML. I highly recommend the above two links to anybody doing software development.
The next issue is how to author XML.
Visual Studio 2005 comes with really good XML tools. Here's more info on what Visual Studio can do with XML.
I use Visual Studio 2005, but some of the people using the software I'm writing may not. I needed a free XML editor for these people.
I looked around and tried out several free XML editors. Many of them did not support .xsd files (which ensure the XML data is in the format you expect).
I found out that Microsoft's *free* version of Visual Studio *does* include the XML tools! These tools are great for creating XML schema, authoring XML, among other things. I'm going to recommend anybody that needs to edit/author XML use Visual Studio C# Express Edition or Visual Studio C++ Express Edition if they don't already have Visual Studio.