JSON is a lightweight data-interchange format, which is more or less human-readable but still easily machine-parsable. While XML is document-oriented, JSON is data-oriented. If you need to transmit a highly structured piece of data, you should probably render it in XML. However, if your data exchange needs are somewhat less demanding, JSON might be a good option.
The obvious advantage JSON has over XML is that since it is data-oriented and (almost) parsable as a hash map, there is no requirement for heavyweight parsing libraries. Additionally, JSON documents are much smaller than the equivalent XML documents. In bandwidth-limited situations, such as you might find on the iPhone, this can be important. JSON documents normally consume around half of the bandwidth as an equivalent XML document for transferring the same data.
While there is no native support for JSON in the Cocoa Touch framework, Stig Brautaset’s json-framework library implements both a JSON parser and a generator and can be integrated into your project fairly simply.