What else could you expect from Google :(

Armed with the minimum ATOM-like document Blogger accepts, I wrote an XSL transformation that converted my proprietary news feed format into Blogger-liked ATOMish format. I used Saxon as the transformation engine, resulting in a nice UTF-8 encoded file that opened easily in Internet Explorer, Firefox and XML Notepad.

The end result: Blogger refused to import the file until I've opened it in FrontPage and prettified the XML text. Obviously they have a "custom" XML parser that has problems with some valid variants of XML. But what else can one expect from company that wants to build everything on its own.