We've been using JSON as our AJAX payload since long before either term was coined, and yes, for in-browser manipulation it's definitely easier to work with for any data-related purpose.
However, bigger picture, payload format is not that important when you have a client-side framework that supports high-level, SOA-style databinding. In SmartClient we use XPath-based binding to either JSON or XML payloads; the XPaths act on the JSON data in a manner similar to JXPath expressions on Java objects.
These two examples bind a grid and form to the Yahoo Image Search service, one in XML format and the other in JSON format. They differ in one property.
These examples are mini-applications; if you want to see the same pattern in less code just look at the adjacent "JSON XPath Binding" example.