if you want to see what's inside an XMP file all you have to do is open it with a word processor (Notepad in Windows works just great), making sure that you do not change anything (unless you're good enough to understand this macro language).
XMP Macro language is similar in a way to HTML and a command looks something like this:
So, when you open your favorite RAW file editing program, the program will create a text file (the XMP file) that contains instructions on what to do with that photo. For example, you move the slider of the Blue Saturation level to +2 and the program will add the line above inside the XML file.
One of the best and biggest characteristics of RAW editing (unlike any other format) is that the editing is non-destructive, which means that the modifications you do are not done to the photo itself but rather to an external file (the XML file) so when you open Photoshop or Lightroom or whatever it is you use to edit RAW the program will look for a file with the same name of you photo but ending with the suffix .xml
If the program does not find that file then it will show the RAW file the way it was captured, if it finds the file it will apply the modifications written in it. The non-destructive nature of this format means that you can go back to a photo you had edited years before and remove those modifications without ruining the photo. The best part is that all these modifications (which translated into an unlimited amount of UNDO, unlike, say, editing a JPEG where undo is limited by your memory) can be done/undone in a non-linear way.
Caleb, you want to be careful. If you spend an hour making modifications to a photo and delete the xml file for that photo you will have to start all over again. As far as the batch process goes, I'm not sure what you are referring to, but I assume you are talking about batch processing the export of a number of RAW files into JPEG, at which point the xml file does not get created because it's not needed since there is no modification to the RAW file.
Look at the .xml file as your best friend rather than as an annoyance.
I'll be happy to answer more questions if anyone needs further clarifications.
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