I don't think XML is any better than HTML for presentation. In fact, HAML is way better, and much more powerful. In the same way I don't see why to use HSS when we have SASS/SCSS, Jade, Less...
These abstract metalanguages are still somewhat limited by the underlying base of HTML and CSS. Some things simply can't be accomplished with CSS, no matter how many SASS macros you write (e.g. reparent an element), or you'll just end up with lot of code to do tasks which would be simple with HSS.
I believe that point of AXR is to replace this underlying base, with something more suitable for web applications. You could still use a metalanguage on top of it (maybe with some tweaking) - you can write XML using HAML anyway.
Sorry about that. It's not fully fleshed out yet. Are you interested in helping us figure out how to make the reparenting syntax as nice as possible? If so, I think the mailing list would be the best place for that... :)
Content is best represented with some mixture of properly-chosen DSLs. For example, Markdown-like language for texts, CSV-like language for tabular data, and so on.
There are too many various type of "content", so if you try to use lowest common denominator (like XML is) you: 1) lack the expression and have to type/generate lot of pointless code and 2) start mixing various types of content in a wrong ways (like tables for layouts, padding with spaces, CSS sprites etc).
I believe that point of AXR is to replace this underlying base, with something more suitable for web applications. You could still use a metalanguage on top of it (maybe with some tweaking) - you can write XML using HAML anyway.