One of the new features of SQL Server 2005 is the integration of XML in the database. Although XML in the database is not my favorite architecture there are situations where it is useful. Since we have not really used XML in a real life project before we are slowly learning its limitations.
A limitation we recently discovered is modifying more than 1 node at a time using XML DML. This limitation is documented in the Books Online under the "replace value of" topic: "If multiple nodes are selected, an error is raised."
The only idea we could come up with is to loop through the nodes until all the nodes have been updated. Lucky for us SQL Server also supports mixing XML with special functions like sql:variable() and sql:column().
Check out the code here since blogger is giving me issues with the XML string :-(