I think the error is because AppendFormat is not passing an object (test) to
the formatted string.  You also need to use HTML entities in the XML or use
CDATA.

string test = "xyz.msi"; 
sb.AppendFormat(@"<Property Id=&quot;MYPROPERTY&quot; value=&quot;{0}&quot;
!?! />", test);

http://www.dotnetperls.com/appendformat
http://en.wikipedia.org/wiki/List_of_XML_and_HTML_character_entity_references



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