Sorry, but your problem does not imply a bug in PECL itself.  For a
list of more appropriate places to ask for help using PECL, please
visit http://pecl.php.net/support/ as this bug system is not the
appropriate forum for asking support questions. 

Thank you for your interest in PECL.

Mixed="true" results in SDO creating a "sequenced type".
One of the things a sequenced type supports is unstructured
text which, given the element in the provided schema 
doesn't really have a type, is what will go into the 
element value. 

To modify a data object which is a sequenced type, you
need to get the data object's sequence interface.  I've updated
the sample to show this.

For more info on sequenced types, see the section on 
"Working with Sequenced Data Object" in the 
docs (http://docs.php.net/en/ref.sdo.html).

Updated Sample
--------------

<?php
    $xsd = <<< EOT
<?xml version="1.0" encoding="utf-8" ?>
<xs:schema targetNamespace="http://fooSchema"
elementFormDefault="qualified"
        attributeFormDefault="unqualified"
        xmlns:foo="http://fooSchema"
xmlns:xs="http://www.w3.org/2001/XMLSchema">
    <xs:element name="root">
        <xs:complexType>
            <xs:choice>
                <xs:element name="element" type="foo:elementType" />
            </xs:choice>
        </xs:complexType>
    </xs:element>
    <xs:complexType name="elementType" mixed="true">
        <xs:attribute name="attribute" type="xs:string" />
    </xs:complexType>
</xs:schema>
EOT;

    $file = tempnam("/tmp", "sdo");
    file_put_contents($file, $xsd);
    $xmldas = SDO_DAS_XML::create($file);
    unlink($file);
    $root = $xmldas->createDataObject("http://fooSchema", "root");

    /*$root->element = "value";
    *  Fatal error: SDO_DataObject:681: cannot cast stdClass to
SDO_DataObjectImpl in ...
    *  So I guess I need to create the element...
    */
    $element = $root->createDataObject("element");
    $element->attribute = "value";
    // How in gods name do I insert a value to the element 
    // itself - not the attributes now? :)

    // mixed="true" results in SDO creating a "sequenced type".
    // One of the things a sequenced type supports is unstructured
    // text.  The following gets the sequence for the element and
    // appends some unstructured text.
    $seq = $element->getSequence();
    $seq[] = "Hello";
    
    echo htmlspecialchars($xmldas->saveDataObjectToString($root, "http://fooSchema", "root"));
    
    /* Outputs
    <?xml version="1.0" encoding="UTF-8"?> 
    <root xmlns="http://fooSchema" xsi:type="root" 
     xmlns:xsi="http://www.w3.org/2001/XMLSchema-instance">
     <element attribute="value">Hello</element>
    </root>
    */
    
    print new SDO_Model_ReflectionDataObject($element);
?>