Inconsistent behaviour (I think) with escaping of invalid characters. Select in MSSQLMS escapes fine but assigning to an xml typed variable fails.

Question

-- How can I assign an xml typed variable and take advantage of the automatic escaping of invalid characters?
-- This query escapes the character fine in MSSQLMS
SELECT * FROM (SELECT CAST(0x1B00 AS NVARCHAR(128)) AS TestCharacter) MyTable FOR XML auto
<MyTable TestCharacter="&#x1B;" />
-- This fails in MSSQLMS and in a similar production procedure.
DECLARE @MyXml XML
SET @MyXML = (SELECT * FROM (SELECT CAST(0x1B00 AS NVARCHAR(128)) AS TestCharacter) MyTable FOR XML auto)
Msg 9420, Level 16, State 1, Line 2
XML parsing: line 1, character 30, illegal xml character
Scott Mitchell

Answer 1

Thanks for the reply. I looked at casting to varbinary but didn't want to cast the large strings that have these characters in them. Sorry for not mentioning that. My example above is simplified. The text isn't only in an attribute and can be quite large.
I want to be able to read the text by just looking at the xml. 
I really would like the escaped form:
&#x1B; for all the invalid characters. 
Scott Mitchell