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Yagsbook is an XML format specifically designed for the mark up of roleplaying game content. It was originally based on DocBook which does much the same for technical documentation. A Yagsbook document can support multiple types of game systems (allowing d20 and GURPS content to be included side by side for example) and rendered to multiple output formats - currently HTML and PDF are supported.
The purpose of Yagsbook is that document content can be structured in such a way that accessing and manipulating it becomes easy. If a set of rules is written in Microsoft Office, then a chapter listing skills is just a sequence of text, possibly with some fancy headings. It is very difficult to do anything useful with that text - for example pull out a list of skills sorted by group, or filtered according to genre. With Yagsbook this becomes possible.
The best example of Yagsbook output is probably the rules for Yags itself. This can be downloaded at http://yags.glendale.org.uk/download.jsp
Note that information is still in the process of being moved across from the old Sourceforge hosted website. Much of the documentation is still on there, and needs to be moved into wiki form.