Most people who use Microsoft Office see the individual applications as tools for getting their work done, not as general-purpose interfaces to information. Sure, people regularly exchange Word, Excel, and PowerPoint files over email, and there are lots of times when you need to reuse files you created earlier, but for the most part information created in Microsoft Office stays in Microsoft Office, coming or going from elsewhere largely by cut-and-paste or by often imperfect file conversions.
With the latest Windows-based version of Office, Microsoft has taken a risky step, opening up Office quite drastically. Developers, even those who aren't using Microsoft Office or even Microsoft Windows will be able to easily process the information inside of Word and Excel files. Instead of just creating Word documents, users will be able to create data files that can be shared with other processes and systems. Excel users will be able to analyze data from a much wider variety of sources, and Access users will be able to exchange information with other databases and programs much more easily than before. Users of the Enterprise Edition of Office will also have a new forms-based interface, InfoPath, for working with other programs.
All of these things are possible because Microsoft has chosen to integrate XML deeply into the core of Microsoft Office.