X3D is an open standard for 3D content delivery. It is not a programming API, nor just a file format for geometry interchange. It combines both geometry and runtime behavioural descriptions into a single file that has a number of different file formats available for it, including the Extensible Markup Language (XML). It is the next revision of the VRML97 ISO specification, incorporating the latest advances in commercial graphics hardware features as well as architectural improvements based on years of feedback from the VRML97 development community.
You can read more about this topic on web3d.org. But in short, it allows you to easily manage interactive content or even the famous Utah teapot that is in front of this text...
X3D is a royalty-free open standards file format and run-time architecture to represent and communicate 3D scenes and objects using XML. It is an ISO ratified standard that provides a system for the storage, retrieval and playback of real time graphics content embedded in applications, all within an open architecture to support a wide array of domains and user scenarios.
X3D has a rich set of componentized features that can tailored for use in engineering and scientific visualization, CAD and architecture, medical visualization, training and simulation, multimedia, entertainment, education, and more.
The development of real-time communication of 3D data across all applications and network applications has evolved from its beginnings as the Virtual Reality Modeling Language (VRML) to the considerably more mature and refined X3D standard.
The modular architecture of X3D allows for layered "profiles" that can provide 1) increased functionality for immersive environments and enhanced interactivity or 2) focused data interchange formats for vertical market applications within a small downloadable footprint composed of modular blocks of functionality ("Components"), that can be easily understood and implemented by application and content developers.
A component-based architecture supports creation of different "profiles" which can be individually supported. Components can be individually extended or modified through adding new "levels", or new components can be added to introduce new features, such as streaming. Through this mechanism, advancements of the specification can move quickly because development in one area doesn't slow the specification as a whole. Importantly, the conformance requirements for a particular piece of content are unambiguosly defined by indicating the profiles, components and levels required by that content.