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I don't write to this list much as I am just sitting on it to learn stuff...
As a contractor in the UK (what a bad time to be just that!) I find that there are some skills that clients want and other skills they don't.
Knowing what XML is and how to use it, does allow me to work with some of the larger clients that use my main technology (ColdFusion)... when the jobs are there.
It is a buzzword and it is a lot of hype. A lot of the people who have come into XML recently (last 2 years), come from the "XML is a better HTML" camp, whereas, those who come from SGML say "XML is a different SGML but used by more people".
We cannot say that WAP is in any way equal to XML because that's only looking at one perspective. It is a very good use of XML, but is a very small part that I think it will drift away into oblivion when mobile bandwidth becomes less of an issue.
The fantastic thing about XML is that it is a movement, a hyped up band wagon and an altogether massive buzzword. Add to it SOAP and every other mnemonic you can think of and you are suddenly talking a language that clients altogether love (mainly because they think that you know what you're talking about). It almost doesn't matter whether you are good at any of the technologies, but if you can talk the talk, people believe you can walk the walk.
The issues come (as with all software development) with bad coding and bad documentation. The one thing I would love to see with XML, is a decent standardised development procedure that could be used by all and set up by the community (that's US!). However, that will probably never happen (unless we come up with another mnemonic) and agree to keep it open and available to all, just like XML.
A1: XML is not dead or dying and I don't foresee it doing that for a very long time. It's just too important, and is only really becoming a prime tool to learn and use (despite what people on this list may say, it's still a new tool to most)
A2: What is needed to make XML useful is a better understanding of XML, and a better definition of the purpose of the tools. It all comes back to documentation and the old sledgehammer and nut of software development, Keep It Simple Stupid!
I hope that makes sense!
PS .NET is an interesting example of another hyped up band wagon. It will be used by so many people without their really understanding it's usefulness or that it's really just the same thing they should already be doing wrapped in XML and some more exciting buzzwords concocted by the Redmond monstrosity!