As I can't test your code easilly I will venture 2 hypothesis: either you have a Perl problem, please use strict;, some of your variables are not declared, or you have a DOM-induced problem with \n and generally whitespaces creating text nodes when you are not expecting them, see my comment in the code.

The following works for me, I just took your code, extracted the relevant function and got it to work:

#!/bin/perl -w
use strict;
use XML::DOM;

my $xml;
$xml=change_dcr_attr (\*DATA, "change", "changed text", "string");
print $xml;

sub change_dcr_attr 
   { my ($dcr,$element_name,$element_value,$type) = @_;
     my $parser=new XML::DOM::Parser;
     my $dcr_doc;                # COMMENT was not declared
      #parse the document
      print "type : $type \n";   # COMMENT you had $what here
      if ($type eq "file"){
           $dcr_doc=$parser->parsefile($dcr) || die "unable to parse d
+ocument: $!";
      }
      else
      {
           $dcr_doc=$parser->parsestring($dcr) || die "unable to parse
+ document: $!"
      }
      #get all  tags

  # COMMENT: unless you're into heavy B&D there is no need to write Ja
+va
  #          in Perl
 
  #    my $dcr_items = $dcr_doc->getElementsByTagName('item');
  #    # iterate over all  tags 
  #
  #    for my $i (0..$dcr_items->getLength-1) {
  #       my $dcr_item=$dcr_items->item($i);

  # This is simpler
       foreach my $dcr_item ($dcr_doc->getElementsByTagName('item'))
        {
         # get the value of the name attrribute
         my $dcr_item_name = $dcr_item->getAttribute("name");
         #process only required field
         #e.g.?Surname?
      next unless $dcr_item_name eq $element_name;
      # drill down to the  tag
      my $dcr_item_child =  $dcr_item->getFirstChild;  # COMMENT: VERY
+ dangerous 
                                                       # if a \n or a 
+comment slips in 
                                                       # you should lo
+op until you get 
                                                       # an element
     # COMMENT this saves you when you come across the last item below
     $dcr_item_child= $dcr_item_child->getNextSibling 
        until( $dcr_item_child->getNodeType == ELEMENT_NODE);


      # get down to the text we want to change

      my $dcr_text_node =  $dcr_item_child->getFirstChild if defined  
+$dcr_item_child;
      if (defined ($dcr_text_node)) {
        if (( $dcr_text_node->getNodeType == TEXT_NODE) ) {
        # finally change the value
        $dcr_text_node->setData($element_value);
        }
      }
      else {
            if ($type eq "string"){
                   print "Error\n";
                   return 0;
           }
      }
    }
     return $dcr_doc->toString; #return the whole DCR XML as a string
   }

__DATA__
<doc>
  <item name="change"><sub>text to be changed</sub></item>
  <item name="change"><sub>text to be changed</sub></item>
  <item name="do not change"><sub>should remain unchanged</sub></item>
  <item name="change">
    <sub>text to be changed</sub>
  </item>
</doc>
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