XML, or eXtensible Markup Language as it is known, is a subset of SGML, and is basically a markup language for documents containing structured information. Even more than that, XML is really a meta-language for describing markup languages. This means, essentially, that you can define you own tags and structural relationships between them. As long as the resulting document is viewed in an XML capable browser, the page will be displayed correctly. Where we say documents here, we mean all the different XML data formats, such as vector graphics, mathematical equations, e-commerce transactions, in fact almost any piece of structured information.

The purpose of SGML is also to markup structured documents, but has been around since 1986, and is not ideally suited to serving documents over the web. So, whilst XML is a subset of SGML, it is also a sort of cut down version of SGML for the Web.

For further information on XML, you could browse W3C.org or XML.com.