< snip >
>I don't know why CURSORTOXML() doesn't encode character/binary field but only memo/binary. It seems like a bug to me.

Sergey,
This is not the only problem with the VFP Xml functions. I am looking forward for a good shared-source implementation of IVFPXML interface (in our company we are working over one) so that it is possible to fix most of the issues that were encountered with these functions. If you have encountered another issues with CursorToXml, or things you want to be fixed I will be glad if you share them with the UT commmunity.
Kind Regards