Do the advantages of XML outweigh the additional storage requirements, transmission time, and processing needed?

yes, flexibility offered by XML is required when trying to connect two dissimilar processing environments in a useful way. Spanning processing domains requires a flexible representation. However, once a message is within a single environment, on either side of the connection, implementers must decide the extent to which XML is required. XML will not always be the choice to represent data within a single processing domain.