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As I understand it, XML is a subset of SGML conceived to simplify it and encourage a more widespread usage.
I guess most useful features was brought into XML, but are there any features in SGML powerful enough to motivate using it instead of XML (and accepting the overhead in complexity)?
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SGML is a complicated set of rules that define document structures. XML is a subset of SGML that does the same thing, using fewer rules. Since XML is a less-complicated derivative of SGML, XML is more easily implemented on large networks such as the Internet. The primary role of XML is to define data.
SGML is very large and complex, however, and overkill for most common office desktop applications. XML is an abbreviated version of SGML, to make it easier to use over the Web, easier for you to define your own document types, and easier for programmers to write programs to handle them.
XML has many similarities to HTML, but constitutes a more flexible way of marking up data. Like HTML, XML is based on SGML. The difference between the two, very simply put, is that XML merely describes a syntax for markup: the names of the tags are not set in concrete and authors can "invent" them as appropriate.
SGML (Standard Generalized Markup Language) is a standard for how to specify a document markup language or tag set. Such a specification is itself a document type definition (DTD). SGML is not in itself a document language, but a description of how to specify one. It is metadata.
One advantage of SGML, if you are editing it manually, is that you can abbreviate tags in various ways. What exactly you can do depends on the SGML declaration for the DTD you are using. For example, in DocBook, you can write things like <literal>foo</>. In HTML, you can omit end tags, which is why you can write <p>foo ... <p>bar without closing the tags. Or you can omit tags altogether, which is why <body> is optional in HTML.
But XML was invented exactly because all these variants make parsing SGML pretty complicated. You will probably find more capable XML editors than SGML editors nowadays.
As far as processing, both forms are equivalent, because you can convert back and forth, except in some corner cases.
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No. The only reason to use SGML is if you work in the publishing industry where SGML is already part of the production process. (There may be other industries but that's the only one where I have experience).
Another way of looking at this is, even though there are some nice features in SGML, it's not worth paying for the tools unless you can clearly show financial benefit by using SGML (see "publishing industry").
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It is impossible to answer unless you have a specific application in mind. You can get better indexing and searching with SGML, but I haven't found a case where it is a better option than XML. I'm sure they are out there, I just haven't found them.
The winning factor is the rendering maturity on multiple platforms of XML. The same compatibility just doesn't exist for SGML. However, if you can control the environment, that may not be a factor. XML just seems to provide 90% of the functionality for much less complexity.
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