The advantage of using tab-delimited data feeds is the simplicity of entering the data using Microsoft Excel. You can gather your information in a spreadsheet and save the file in the tab-delimited format. However, as your product library grows, or if it already is quite large, managing the data in a spreadsheet can be cumbersome. Also, as the data is manually entered, there is an increased possibility of formatting or data inconsistencies.
The advantage of XML data feeds, is that they are most often generated by the eCommerce application driving your store. Automated generation can save you a significant amount of time when preparing your product data for export and should ensure that your data will exported just as it appears within your web store.