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The relational model is set-theory and logic applied to database management, what is xml?

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A simple solution for conveying meaninful information about simple entities and simple relationships. Like you say - different solutions for different things.

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The complete set of constraints for all tables in a database is what describes the database and is the only thing the DBMS can use to 'understand' the data. How does xml handle this?

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An XSD schema and the Document Object Model. Granted, a standard XML schema is not enough to control referential integrity and relationships in itself. However, if XML is being mapped onto an RDBMS (such as SQL Server 2000), a schema using the SQL namespace and processed by the SQLXML engine is more than adequate to 'understand' the data in the way you suggested.

(In fact you get two levels of schema, the XML-level schema AND the database schema (the former is generally born of the latter). That means that the data, relationships and integrity are validated both during code-execution by the SQLXML engine and during the standard database transaction. Bonus!)

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We as developers and DBAs can do our part by not using these features and by continuing to request more important features and functionality, especially a better implementation of the relational model.

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I'm not quite sure why we should be protesting through not using features when they can (and in my case have) been useful.. That seems like a political decision rather than a practical one. Can't we have both - data services features as well as improvements to the relational implementation? After all, data access is one of the roles of a DBMS.