XML and Databases
An intranet doesn't have to use XML or databases of any kind. Every page can be static HTML with hard-coded content, format and function – although the amount of functionality that will be available to static HTML pages will be quite limited.
The reason why XML or databases should be used in the implementation of your intranet is because they allow for the simple separation of content from format and functionality. This makes long-term maintenance of the intranet more efficient (thus less expensive). It also allows you to retain the value of your content because it will be easily reusable in other formats (wireless phones, PDAs, WebTV, etc.), and delivery channels can be created quite quickly.
A database should be used to store your data. This will likely be what the back-end of your CMS reads from and writes to. As well, any information from the functional components hosted on your own server will likely be tracked here.
XML comes into the picture when data needs to be transferred from one server to another (this is because transferring entire databases can be prohibitive due to their size). Depending on what system your IT department puts in place for your intranet, you may need to use XML to transfer information between servers.