XML_Parser provides an object-oriented abstraction to PHP's ext/xml. It helps you processing XML documents by supplying methods that are needed when working with XML documents, like automatic error handling, parsing from a file, URL or string as well as an easy way to register callbacks.
XML_Parser uses SAX-based parsing, which is a simple API to retrieve information from XML documents. While the parser reads the document, it will call methods for the different nodes that are found. These nodes range from opening and closing tags to character data and processing instructions.
You will not be able to use XML_Parser directly to parse your documents, but you have to create a new class that extends XML_Parser and implement handlers for the tags and all other elements you need to process.
Several of PEAR's XML packages use this approach and thus rely on XML_Parser. If you would like to take a look at real-life examples, just install XML_RDDL, XML_Beautifier, XML_Statistics or XML_Serializer.
A tutorial that explains nearly every feature of XML_Parser is available at http://www.schst.net/articles/XML_Parser.