A sitemap.xml file is a file that you can use to define the structure of your site to the top search engines. Although it won’t improve the ranking of your pages (according to Google et al), it allows the search engines to get a better idea of the structure of your site, which means that they will index it more efficiently, and taking account of the structure that your website might imply, but which it might be difficult for a search engine to pick up on.
So, basically a key fundamental of Search Engine Optimisation, SEO: hands up who doesn’t have a sitemap.xml file? Most of you based on past experience! (Recently we’ve read some opinion that you shouldn’t submit sitemap.xml files, because by not doing that you can compare the way Google actually indexes the site with the way you think it ought to, and adjust accordingly. That’s a great idea; IF you have the time to experiment in this way, wihch not many do).
We’ve always wondered exactly how the interaction between sitemap.xml files and the site goes, and recently on Matt Cutts’ blog (a Google employee), he implied that Google will use the information supplied by your sitemap.xml file but augment it with other pages it finds from other links internal and external to your site. That’s great news: it means you can focus on getting your sitemap in order, gradullay growing your site (say through PR or news articles) and not have to worry that they will be ignored by Google if you don’t update the sitemap.xml file and resubmit it after every single change.
Note that we’d always recommend that you update the sitemap.xml file every 6 months or so and definitely after you’ve built up a lot of changes.