1) XML only represents data
Essentially yes, data in a flat file.
2) XSL/XSLT are the stylesheets used to present the XML data
3) What is a parser? What does it do in regards to XML?
4) Why do I need expat parser and sablotron? why doesn't the xml display in explorer 6?
You don't need them, there is a variety of parsers available. XML does show in IE6 but as a collapsable tree. You could use XSLT in IE6 to generate something formatted. A parser allows the data to be put into variables and dealt with in the same way you could deal with database data. The Adobe SVG plugin is acted upon parsed data, and that's nothing like a collapsable tree.
5) I'm trying to grab XML feeds with PHP and convert them into html files, do I still need the expat parser and sablotron to run on the server?
You should be able to use the standard XML parser on the standard XML installation, with Expat (and not sablotron):
Note the bit that says to not Apache now comes with expat as standard.