I don't know if this is in the book or not. My dad sent me the link to this.

Adobe Camera Raw 'Sidecar ".xmp" files'
Have you ever noticed that along with your camera raw image files, sometimes there is a sister file with the same name but with a .xmp extension? “What are these,” you ask, “and where do they come from?” Let's start with how they are created. These files are sometimes created when you process/open a camera raw file via the Adobe Camera Raw (ACR) dialog. Why only sometimes? Well, that depends on how you have your Preferences set up.
To see what I'm talking about, open a file via the ACR plug-in and click on the fly-out menu (circle with a triangle on the right next to Settings) and select Preferences. If your 'Save image settings in:' is set to 'Sidecar “.xmp” files', then whenever you open and process a camera raw file via the ACR plug-in, an accompanying .xmp file will be created. Okay, so we know how these files are generated, but what are they? One thing to try for fun is to open these .xmp files in a text editor. You'll see a bunch of Metadata represented and some other fun stuff. These .xmp files are records of how you processed your file. After the files have been generated, if you re-open your original camera raw file, those settings will be re-applied. These .xmp files will also update how your thumbnails are viewed in the File Browser, for instance. Want to start over from scratch, simply move or delete that .xmp file.
http://avondale.typepad.com/rawformat/2005/02/adobe_camera_ra.html