If you just need a light-weight API that is only ever going to be REST orientated, then use JSON.
If you're building a very complex Enterprise SOA system, use XML as the associated technologies (xsd, xsl, soap+ws-* etc) will be very useful.
If people are starting to invent XML like technologies for JSON (namespaces or schemas etc), then why not just use XML? It's already been done and works well.