Here's a scenerio of how it works. Last week I decided to replace the 40 GB HDD in my kid's computer with a 80 GB HDD. The issue was that I didn't want to start the install process from scratch mainly because I no longer have the original Windows XP cds. I have no idea where they went to. So I installed the new 80 GB HDD and simply imaged the 40 GB HDD to it using the Drive to Drive option in DriveImage XML. Once it completed I removed the main 40 GB HDD and made sure the 80 GB HDD was set to be the main drive. Worked perfectly.
Another way to use DriveImage XML would be to create an image and put that image on a separate hard drive for back up. That way if my hard drive crashes I can simple put in a new one and re-image from the back up. Of course in order to do that you may need to create a bootable cd with DriveImage XML on it. I recommend Ultimate Boot CD for Windows.
DriveImage XML comes in two flavors. Free for home and persona use and Pro for commercial use. I could see where DriveImage XML would be incredibly handy at work where I maintain over 30 computers and 5 servers. I could create pc images as backups to a central server in case a hard drive goes out. It's also a great way to get a computer back to it's original "new" state.
Another great feature of DriveImage XML is that you can browse the image just like it's a folder. Very handy!