I think this is a code version issue; the current version of System::XMLEncode() doesn't generate XML that looks anything like what you've posted above. Here's part of a recent universe dump:
Code:
<ClientUniverse>
<m_objects>
<System>
<visibility value="0"/>
<UniverseObject>
<visibility value="0"/>
<m_id value="0"/>
<m_name>"<![CDATA[System0]]>"</m_name>
<m_x value="783"/>
<m_y value="798"/>
<m_owners>
<owner value="0"/>
</m_owners>
<m_system_id value="-1"/>
</UniverseObject>
<m_star value="2"/>
<m_orbits value="2"/>
<m_objects>
<map_object id="153" orbit="0"/>
<map_object id="154" orbit="1"/>
</m_objects>
<m_starlanes_wormholes/>
</System>
Don't forget that for some code changes to work, you need to rebuild both the server
and the client, since they both need to generate and parse XML objects the same way.