Don't do that. Decode them using HTML::Entities, preferrably to UTF-8, and stick that in the XML. If your XML documents are not in UTF-8 encoding, your XML generator should entitify automatically characters the encoding cannot natively represent, without requiring any particular care of you. If you're not using an XML generator, you should be.

For good measure, in case you aren't familiar with the subject, read The Absolute Minimum Every Software Developer Absolutely, Positively Must Know About Unicode and Character Sets (No Excuses!)

I think it is better to translate them to character references. The entities can't be represented accurately other than with Unicode. The HTML entity resolver would need to produce UTF-8 strings.

This assumes that the HTMl to XML process is converting escaped text to escaped text. If the text is being unescaped for other reasons, then the entities should be expanded to UTF-8 and escaped on output.

They should always be expanded to UTF-8 and escaped on output. Your HTML parser should just give you Unicode, and whatever XML generator you use should be escaping it automatically for you as appropriate for the target encoding.

Don't attempt to transcode entities and what manually to insert literal bytes into the output XML stream. That way lies madness (and a lot of buggy code; most code dealing with XML out there is quite broken with regard to encodings).

Makeshifts last the longest.

http://www.w3.org/TR/xhtml1/#h-A2 has links to the DTD files for XHTML1.