Hi Claudio in first place what is the version of the parser that you are running? For this to happen you should be running a version previous to the msxml parser 3.0 if this is the case you should consider upgrade to 3.0 or even 4.0 parser that don't have this problem.
I'm using msxml 3.0 and I can do a loadXML with an xml generated by the CURSORTOXML function plus if your xml has Portuguese characters you don't want it to be encoded as UTF-8 believe me.

>Hi!
>
>I´ve run three simple commands as it follows:
>
>CursorToXML("Cursor","lcXML",1,1)
>oXML = CreateObject("Microsoft.XMLDOM")
>oXML.LoadXML(lcXML)
>
>But it returns a .F.
>
>After some attempts, I´ve discovered that the problem was with the encoding... I´ve need to ripped off the enconding part, doing the following workaround that works fine:
>
>oXML.LoadXML(Strtran(lcXML,[ encoding="Windows-1252"],""))
>
>
>I´ve played with all the options of the CursorToXML´s third parameter, but anyone does works...
>
>Does anybody have any idea of what´s happening?