XML

The Extensible Markup Language (XML) is a markup language much like HTML.
XML is extremely useful for keeping track of small to medium amounts of data without requiring a SQL-based backbone.

XML Parser Architectures 

The two most basic and broadly used APIs to XML data are the SAX and DOM interfaces.

• Simple API for XML (SAX) : Here, you register callbacks for events of interest and then let the parser proceed through the document. This is useful when your documents are large or you have memory limitations, it parses the file as it reads it from disk and the entire file is never stored in memory.
• Document Object Model (DOM) API : This is a World Wide Web Consortium recommendation wherein the entire file is read into memory and stored in a hierarchical (tree-based) form to represent all the features of an XML document.

SAX obviously cannot process information as fast as DOM can when working with large files. On the other hand, using DOM exclusively can really kill your resources, especially if used on a lot of small files.

What is SOAP and how does it relate to XML?

The Simple Object Access Protocol (SOAP) uses XML to define a protocol for the exchange of information in distributed computing environments. SOAP consists of three components: an envelope, a set of encoding rules, and a convention for representing remote procedure calls. Unless experience with SOAP is a direct requirement for the open position, knowing the specifics of the protocol, or how it can be used in conjunction with HTTP, is not as important as identifying it as a natural application of XML

 Can I replace HTML with XML?

No, XML is not a replacement of HTML. XML provides an alternative approach to define own set of markup elements, and it is used for processing and storing data.