In the 11+ years I've been doing web development, I've seen XML used as:
- app configuration specification, e.g., this is THE way J(2)EE deployment descriptors are specified
- app declaration language, e.g., there are translators that convert back and forth from XML to code
- app resource specification, e.g., declaration of app-related control and supplemental support and extension data
- web and app server regulation and control, e.g., Apache, Tomcat, etc.
- inter-system representation for data exchanges, e.g., OASIS in the insurance industry
- AJAX (yes, some people actually use XML for this)
- data serialization, e.g., saving data that does not easily decompose into relational databases but has entity/attribute content
- XHTML is (a fully compliant) XML reformulation of HTML 4 and the ongoing evolution of markup for the browser is in the direction of pure XML
- representation of content that may be translated via XSLT into a variety of final forms that are not XML when delivered
The shorter answer is XML has bunches of uses and, yes, you should become acquainted with it, if you intend to do web-work.This is not even an "advanced" topic/skill in the web development arena. You may not need to become a full-blown expert in the design and creation of DTDs and schemas, but you need to grasp thoroughly the fundamentals and be able to read and compose well-formed XML documents.