Microsoft clears the confusion caused by the shift from MSXML6 as an out-of-band to in-band component.
"In Microsoft lingo, OOB is a component installed on top of Windows. i.e. clean install of Windows doesn't contain the component, thus an OOB installer required to gain functionality. In MSXML6, OOB install was originally accomplished via MSI but more recently KB<number>.exes—which're merely wrappers for underlying MSXML6.MSI—are how we're distributing OOB. For e.g., latest OOB installed MSXML6 was released on 11/23/2009 in KB973687," explains Microsoft.
"In past years, we worked to move MSXML6 in-band for all supported Windows. This began with Vista RTM and has remained the practice for all OS releases. Specifically, MSXML6 is in-band for XP SP3, Vista and Windows 7. Note that Vista and Win7 Server counterparts also contain in-band MSXML6. i.e. Windows Server 2008 and Windows Server 2008 R2 respectively. One caveat, those using Windows Server 2003 will still need to install MSXML6 via MSI/KB<number>.exe wrapped MSIs.
So what does all of this mean for you? If your MSXML6 dependent app is supported on XP SP2 and Server 2003, you'll need to instal OOB package. For all other OSs above, your MSXML6 dependent app needn't worry about installing MSXML6."