Thanks for the help.
re: Q247708. We're on MSXML 3.0, so this should not apply. Besides, the first solution they offer is to convert the xml to UTF-16!!!
re: Q303612. The data is coming from a SQL Server 7 database through the IIS web server to the browser. The error is happening before it gets to the browser, so this shouldn't apply. And if the path was from the browser to the server, it wouldn't have been UTF-16 as IE would have submitted it as UTF-8. Although it does point out potential future issues (no matter what unicode characters you need to enter through IE, they better exist in UTF-8).
I had also checked out the link from Q303612 to Q232580 (UTF-8 and SQL Server). I passed this on to the developers as another potential issue. They haven't responded yet.
My head hurts (and it's not for any fun reasons!)
Brian Bronson