All:
I heard back from SAP on my incident regarding the special characters in the XML for clients on 604. They asked us to implement note 2317671, which is only intended for customers on system version 600 or 604. So we implemented note 2317671. It made us bring in note 2315240 (undeclared note) and perform manual configuration steps before we could continue with 2317671. Once both were implemented, I regenerated the XML (only step, no additional steps) and the special characters are gone from the XML.
Thank you SAP for escalating this issue and fixing it for us.
Cynthia Garza