The sweet spot for JSON is serializing simple data structures for transfer between programming languages. If you need more complex data structures (maybe with some kind of schema for validation), use XML. If you want to do full blown RPC use SOAP or XML-RPC. If you just want a light-weight format for moving data around, JSON fits the bill admirably.
What do we lose from not using XML? The ability to use XML tools. If you’re someone who breathes XSLT that might be a problem; if like me your approach when faced with XML is to parse it in to a more agreeable data structure as soon as possible you’ll find JSON far more productive.