There are huge differences. It all depends on what you're gonna use the data for. For static data that doesn't have to be manipulated, XML is a markup that can be passed from e.g. php to perl to .net and still contain and show the same stuff.
So it's great for web services, and passing though tiers.
You can rather easily install a httpmodule or modify the server-settings, not to let .xml files be gotten withour requiring authorisation.
Using a databases allows for relations. It allows for stored procedures. It allows for SQL. Data is easily gotten. Databases are mostly used for data storage. XML is more of an intermediate language - to use if you don't know what type of tier comes next. Hence asynchronos javascripting and
xml and not asynchronos javascripting and tables; because then the data is language specific.
recommended read:
http://msdn.microsoft.com/library/de...tml/boagag.asp