By and large I've stayed away from XML in the database for all the reasons that most people here can list. I have found that XML can play a part in feeding data to the system. We've found that, depending on the number of columns and their size, that using XML to send in larger amounts of data works better than multiple stored procedure calls. So, for example, we want to insert into table X. We can write a traditional insert proc and then have the developers call it. For one row, this works flawlessly. It also works great for 3,5,10 & even 30 rows. But after a time, and that does vary, testing is required, the number of calls gets nasty. So instead, we pump the data into XML and then use OPENXML (with all it's memory bloat) to shred the data into a table with a single insert statement and it performs better than the multiple calls from the middle tier or client.

The only thing I'd say about implementing this elsewhere is testing, testing, testing. Verify the results in your environment before you bet the farm on any given solution.