XAML is just XML, but with a set of rules about its elements and attributes and their mapping to objects, their properties, and the values of those properties (among other things).
You can think of XAML as a clean, modern reinvention of HTML and CSS. In universal apps, XAML serves essentially the same purpose as HTML. It provides a declarative way to represent user interfaces.
Working with graphic designers etc
XAML is makes it easy for programmers to work with others such as graphic designers. It encourages a nice separation between visuals (and visual behavior such as animations) and the rest of the code, and enables powerful styling capabilities. XAML pages can be opened in Blend as well as Visual Studio or entire XAML-based projects can be opened in Blend.