XML-RPC is a remote procedure call protocol. It allows software running on disparate operating systems from different environments to make procedure calls over the Internet (by using HTTP). Information on data processing is XML- encoded.
With time the XML-RPC protocol has evolved into the SOAP protocol. Although the SOAP protocol is relatively new and defines multiple different encodings, XML-RPC is still widely preferred due to its simplicity and the fact that it is much easier to use.
What does WordPress use it for?
In WordPress XML-RPC enables you to use the Pingback feature to publish remotely articles, posts, etc. as this requires specific communication with an external application.
Pingback allows you to notify other blog authors when you link to their articles (and vice versa).
To publish remotely you might also try Weblog which is installed locally on your PC. Weblog enables you to create posts or articles offline. Next time you connect to the Internet, the application sends the ready posts directly to the WordPress website.
Each WordPress installation contains an xmlrpc.php file in its home directory.
All of the XML-RPC functions are run through this file. xmlrpc.php enables WordPress to transfer information and communicate with external applications.