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XML is a core part of .NET, and all Microsoft .NET products support XML in some form or another. On that basis no, .NET project can avoid the use of XML somewhere down the line, so understanding it is extremely important.
XML is a system used to define, validate, and share document formats. It comes from the same heritage as HyperText Markup Language (HTML).
The common heritage of HTML and XML is Standardized General Markup Language (SGML), first published by the International Organization for Standardization, or ISO, in 1986.
SGML was designed to offer a hardware- and software-independent way to display text electronically in the burgeoning electronic publishing industry. Markup is a term used by typesetters referring to the annotations given to text on documents, indicating how text should be displayed, such as bold , italic, or underlined. In some respects punctuation can be thought of as a markup language since it indicates the structure of a piece of text, such as where a line should end (period) or a list of items begins (colon).
In essence HTML documents are a subset of SGML documents designed for use on the World Wide Web.
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