Information in an XML document is stored in plain-text. This might seem like a restriction if were thinking of embedding binary information in an XML document. There are several advantages to keeping things plain text. First, it is easy to write parsers and all other XML enabling technology on different platforms. Second, it makes everything very interoperable by staying with the lowest common denominator approach. This is the whole reason the web is so successful despite all its flaws. By accepting and sending information in plain text format, programs running on disparate platforms can communicate with each other. This also makes it easy to integrate new programs on top of older ones (without rewriting the old programs), by simply making the interface between the new and old program use XML.
For example, if you have an address book document stored in an XML file, created on a Mac, that you would like to share with someone who has a PC, you can simply email them the plain text address book XML document. This cant be done with binary encoded information which is totally platform (and program) dependent.
Another example is web enabling legacy systems. It is very feasible to create a Java web ennoblement application server that simply uses the services provided by the underlying legacy system. Instead of rewriting the legacy system, if the system can be made to communicate results and parameters through XML, the new and old system can work together without throwing away a company's investment in the legacy system.