I'm no expert by far but from the various companies I've worked for we generally use XML in small data environments or configuration values (web.config is a great example).
When you have large amounts of data, generally, you will want to report on that data. And XML is not a great source for reporting. In the grand scheme of things, it seems as though a transactional database is easier to report/search against than XML.
Does this make sense? As I said above, I'm no expert but from my experience this seems to be the case. Also, I believe Microsoft integrated JSON support due to the wave of developers moving over to client-side or scripted actions to enhance the visuals of the UI (Ajax) and Microsoft's Ajax has not been used as much as other libraries like jQuery and MooTools (Yahoo's YUI is also in that mix) due to their beautiful integration of serializable objects using JSON.
I find myself writing code now implementing the JSON serializer in my VB code. It's WAY too easy and from an upgrading/modifying standpoint, you can't beat it. It's Microsoft's way of keeping us addicted to VS I guess. I have recently converted an enterprise application to using Ajax (via jQuery) and using JSON format. It took approximately 2 weeks to do so. I actually thank Microsoft for integrating it because without it, I would have had to write quite a bit of extra code.
