Currently I use

function &xml_encode(&$xml) {
  $xml = str_replace(array('?', '?', '?',
                           '?', '?', '?',
                           '?'
                          ),
                     array('ü', 'Ü', 'ö',
                           'Ö', 'ä', 'Ä',
                           'ß'
                          ),
                     $xml
                    );

  $xml = preg_replace(array("/\&([a-z\d\#]+)\;/i",
                            "/\&/",
                            "/\#\|\|([a-z\d\#]+)\|\|\#/i",
                            "/([^a-zA-Z\d\s\<\>\&\;\.\:\=\"\-\/\%\?\!\'\(\)\[\]\{\}\$\#\+\,\@_])/e"
                           ),
                      array("#||\\1||#",
                            "&amp;",
                            "&\\1;",
                            "'&#'.ord('\\1').';'"
                           ),
                      $xml
                     );

  return $xml;
} 

to 'encode' strings for use with XML. A 'PHP Land' implementation of this would be handy, I think.