XML Worker parses (X)HTML snippets and the associated CSS and converts them to PDF. It is an extra component for iText, and is a new version of the old HTMLWorker which used to be shipped with iText.
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Support was added for more HTML tags and CSS attributes. The most important difference is a change in the architecture. If you were using previous versions of XML Worker, you'll need to make some changes to your own code after upgrading to XML Worker 1.1.0. The change in the architecture was necessary to fix some threading problems.