I redownloaded 1.61 and compared to 1.60, this time the changes did show up, not sure why they didn't show the first time.

Anyway, I added the line of code to the function just like you indicated:
PHP Code:
    function zen_xml_sanitizer ($str) {
        
$_strip_search = array("![\t ]+$|^[\t ]+!m",'%[\r\n]+%m'); // remove CRs and newlines
        
$_strip_replace = array('',' ');
        
$_cleaner_array = array(">" => "> ""®" => """®" => """™" => """™" => """\t" => """    " => "");
        
$str html_entity_decode($str);
        
$str strtr($str$_cleaner_array);
        
$str preg_replace($_strip_search$_strip_replace$str);
        
$str strip_tags($str);
        
$str eregi_replace("[^[:alnum:][:space:].,!()'-_/+=?]"""$str);
        
$str htmlentities($str);
        
$str htmlspecialchars($str);
        
//$partial_entity_array = array("quot;", "lt;", "gt;", "amp;", "apos;", "nbsp;", "deg;", "plusmn;", "ordm;", "sect;", "up2;", "circ;", "up3;", "uml;", "acute;", "ordf;", "frac12;");
        //$full_entity_array = array(""", "<", ">", "&", "'", " ", "deg", "+/-", "", "", "^2", "^", "^3", "", "", "", "1/2");
        //$str = str_replace($partial_entity_array, $full_entity_array, $str);
        
return $str;
    } 
However, this didn't work. I created the file again and reuploaded and I still get the same error from Google and line 4 still says:
<title>S&A</title>

Any other ideas?
In the meantime, I've manually edited the xml file and changed that line to
<title>S&amp;A</title>