What is JAXB and why would I use it?
Here's a reason not to use it: performance suffers. There is a good deal of overhead when marshaling and unmarshaling. You might also want to consider another API for XML-Object binding -- such as JiBX: http://jibx.sourceforge.net/
I'm a big fan of JAXB for manipulating XML. Basically, it provides a solution to this problem (I'm assuming familiarity with XML, Java data structures, and XML Schemas):
Working with XML is difficult. One needs a way to take an XML file - which is basically a text file - and convert it into some sort of data structure, which your program can then manipulate.
JAXB will take an XML Schema that you write and create a set of classes that correspond to that schema. The JAXB utilities will create the hierarchy of data structures for manipulating that XML.
JAXB can then be used to read an XML file, and then create instances of the generated classes - laden with the data from your XML. JAXB also does the reverse: takes java classes, and generates the corresponding XML.
I like JAXB because it is easy to use, and comes with Java 1.6 (if you are using 1.5, you can download the JAXB .jars.) The way it creates the class hierarchy is intuitive, and in my experience, does a decent job abstracting away the "XML" so that I can focus on "data".
So to answer your question: I would expect that, for small XML files, JAXB might be overkill. It requires you to create and maintain an XML schema, and to use "standard textbook methods" of utilizing Java classes for data structures. (Main classes, small inner-classes to represent "nodes", and a huge hierarchy of them.) So, JAXB is probably not that great for a simple linear list of "preferences" for an application.
But if you have a rather complex XML schema, and lots of data contained within it, then JAXB is fantastic. In my project, I was converting large amounts of data between binary (which was consumed by a C program) and XML (so that humans could consume and modify that data). The resulting XML Schema was nontrivial (many levels of hierarchy, some fields could be repeated, others could not) so JAXB was helpful in being able to manipulate that.