It is a list of URLs for your website in a form of XML file (it also known as Google Sitemap because it was introduced first by Google). It allows you to include additional information about each URL such as the date it was last updated, how often it changes, and how important it is. XML format ensures that this information can be easily processed on different kinds of computers, applications and systems, so Search engines (Google, Yahoo, Bing, Ask, AOL etc) won't have any problems with understanding your sitemap files.
XML Sitemap sample:
<?xml version="1.0" encoding="UTF-8"?>
The sitemap example above contains 2 URLs and all of the allowed optional tags:<lastmod>, <changefreq> and <priority>.
There are a couple of limitations imposed by Google: a single XML sitemap file can contain not more then 50,000 URLs and may not be larger than 10 Megabytes. If you need to display more URLs you can split the XML sitemap into many files and register them at Google Webmaster Tools.