Rys, i have one small example for you, supouse you have some data you will keep in a relational database, you must know a priori, all kinds of data types, leaving no space for auto-extensibility, so with a XML type column you could define customized data types acordingly to the applications and have infinite numbers of data structures within a single "static" relational database model.

I have been using this kind of solutions for a while with great results, and i always had to use a text or ntext column type for storing the XML data, parsing it after, but if SQL 2K5 comes with it, even better.