I think the only important thing is to choose a format that you prefer and can navigate quickly. XML and JSON are both fine formats for configs and are widely supported--technical implementation isn't at the crux of the issue, methinks. It's 100% about what makes the task of config files easier for you.
I have started using JSON, because I work quite a bit with it as a data transport format, and the serializers make it easy to load into any development framework. I find JSON easier to read than XML, which makes handling multiple services, each using a config file that is modified quite frequently, that much easer for me!
