At first glance, XMLports are for importing and exporting data, similar to the Dataports. But XMLports differ considerably in their operation, setup, and primary intended usage.
In the two-tier client, XMLport objects can only be used for XML-formatted data. They must be "fired off" by C/AL code resident in some other object type (in other words, a Classic Client XMLport cannot be run from the Object Designer and cannot be run directly through a menu entry).
In the three-tier client, XMLports now handle both XML structured data and other text data that was previously handled by Dataports. The description of a Dataport's functionality now applies to the three-tier client XMLport. The three-tier client XMLport can be run directly from a menu entry.
XML stands for eXtensible Markup Language. XML is a markup language much like HTML. XML was designed to describe data so that it would be easier to exchange data between dissimilar systems, for example, between your NAV ERP system and your accounting firm's financial analysis and tax preparation system.
XML is designed to be extensible, which means that you can create or extend the definition as long as you communicate the revised XML format to your correspondents. There is a standard set of syntax rules to which XML formats must conform. XML is becoming more and more important because most new software uses XML. For example, the new versions of Microsoft Office are quite XML "friendly". All web services communications are in the form of an exchange of XML structured data.