What does xmlrpc.php do and how can I use it?
You should be able to use it for other RPCs. Example xml-rpc post for user.update shows an example of a user.update method call.  

&lt;?xml version="1.0"?&gt;
&lt;methodCall&gt;
   &lt;methodName&gt;user.update&lt;/methodName&gt;
   &lt;params&gt;
     &lt;param&gt;
       &lt;struct&gt;
         &lt;member&gt;
           &lt;name&gt;uid&lt;/name&gt;
           &lt;value&gt;&lt;int&gt;38&lt;/int&gt;&lt;/value&gt;
         &lt;/member&gt;
       &lt;/struct&gt;
       &lt;struct&gt;
         &lt;member&gt;
           &lt;name&gt;name&lt;/name&gt;
           &lt;value&gt;&lt;string&gt;diana.ruiz12&lt;/string&gt;&lt;/value&gt;
         &lt;/member&gt;
         &lt;member&gt;
           &lt;name&gt;mail&lt;/name&gt;
            &lt;value&gt;&lt;string&gt;ndy.r@eeuwkern.org&lt;/string&gt;&lt;/value&gt;
         &lt;/member&gt;
         &lt;member&gt;
           &lt;name&gt;pass&lt;/name&gt;
           &lt;value&gt;&lt;string&gt;candy9223&lt;/string&gt;&lt;/value&gt;
         &lt;/member&gt;
       &lt;/struct&gt;
     &lt;/param&gt;
   &lt;/params&gt;
&lt;/methodCall&gt;


It doesn't look like a widely used feature, and it will be moved out of core in Drupal 8.

See also Services Tutorials and Examples.