Description:
------------
Character coding mess...
index.php and example.xml are saved in koi8-r encoding

Reproduce code:
---------------
index.php:
<?php
include 'example.xml';
$xml = simplexml_load_string($xmlstr);

function open_linkset($num)
{
	global $xml;
	eval("foreach(\$xml->linkset[$num]->mylink as \$mylink)
	{
		generate_link(\$mylink->title, \$mylink->href);
	}");
}

function generate_link($title, $href)
{
	global $link;
	$link[]='<a href="?'.$href.'&open='.$_GET[open].'">'.$title.'</a>';
}

function generate_linkbox()
{
	global $xml, $link;
	$i=0;
	$array_size=sizeof($xml->linkset);
	foreach($xml->linkset as $mylinkset)
	{
		echo '<a href="?open='.$i.'">'.$mylinkset->name.'</a>';
		echo "<br>";

		if(isset($link) && $_GET[open]==$i)
		{
			$k=0;
			$link_array_size=sizeof($link);
			foreach($link as $mylink)
			{
				echo "&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;".$link[$k];
				if($link_array_size<>$k)echo "<br>";
				$k++;
			}
		}
		$i++;
	}
}

if(isset($_GET[open]))
{
	open_linkset($_GET[open]);
	generate_linkbox();
}else{
	generate_linkbox();
}
?>

example.xml:
<?php
$xmlstr = <<<XML
<?xml version='1.0' encoding='koi8-r' standalone='yes'?>
<linkbox>
	<linkset>
		<name>&#1043;&#1083;&#1072;&#1074;&#1085;&#1072;&#1103;</name>
		<mylink>
			<href>to=fotos</href>
			<title>Fotos</title>
		</mylink>

		<mylink>
			<href>to=art</href>
			<title>Art</title>
		</mylink>
	</linkset>

	<linkset>
		<name>Discussion</name>
		<mylink>
			<href>to=forum</href>
			<title>Forum</title>
		</mylink>

		<mylink>
			<href>to=guestbook</href>
			<title>Guestbook</title>
		</mylink>
	</linkset>
</linkbox>
XML;
?>

Expected result:
----------------
Executing index.php I expect to see 2 linksets:
&#1043;&#1083;&#1072;&#1074;&#1085;&#1072;&#1103;
Discussion

Actual result:
--------------
The actual result after executing index.php:
Главная
Discussion