Try to add following registry key with DWORD value of 0. See http://msdn.microsoft.com/en-us/library/ms171744.aspx for details.

HKEY_LOCAL_MACHINE\Software\Microsoft\MSSQLServer\Client\SQLXML4\SQL2000CompatMode 

>I'm using Doug Hennig's code to import large .dbf files into SQL Server 2008 and have discovered that all chr(13) are removed when importing with SQLXMLBulkLoad.
>
>Using:
>cursortoxml(alias(),lcData,1,512+8,0,lcSchema)
>
>I have verified that the XML file contains the CR+LF
>
>The memo fields are wrapped in CDATA in the XML file.
>
>Any ideas?