With regard to the note below about needing htmlentities to avoid warnings about unterminated entity references, I thought it worthwhile to mention that that you don't need to with createTextNode and DOMText::__construct.  If you mix both methods of setting text nodes and do (or don't) apply htmlentities consistently to all data to be displayed, you'll get &s (or warnings and badly-formed xml).

It's probably in one's best interest to extend DOMElement and DOMDocument so that it creates a DOMText node and appends it, rather than passing it up to the DOMElement constructor.  Otherwise, good luck using (or not using) htmlentities in all the right places in your code, especially as code changes get made.

<?php

class XDOMElement extends DOMElement {
    function __construct($name, $value = null, $namespaceURI = null) {
        parent::__construct($name, null, $namespaceURI);
    }
}

class XDOMDocument extends DOMDocument {
    function __construct($version = null, $encoding = null) {
        parent::__construct($version, $encoding);
        $this->registerNodeClass('DOMElement', 'XDOMElement');
    }

    function createElement($name, $value = null, $namespaceURI = null) {
        $element = new XDOMElement($name, $value, $namespaceURI);
        $element = $this->importNode($element);
        if (!empty($value)) {
            $element->appendChild(new DOMText($value));
        }
        return $element;
    }
}

$doc1 = new XDOMDocument();
$doc1_e1 = $doc1->createElement('foo', 'bar & baz');
$doc1->appendChild($doc1_e1);
echo $doc1->saveXML();

$doc2 = new XDOMDocument();
$doc2_e1 = $doc2->createElement('foo');
$doc2->appendChild($doc2_e1);
$doc2_e1->appendChild($doc2->createTextNode('bar & baz'));
echo $doc2->saveXML();

?>

Text specified in createElement:
<?xml version=""?>
<foo>bar &amp; baz</foo>

Text added via createTextNode:
<?xml version=""?>
<foo>bar &amp; baz</foo>

To create elements with attributes,

<?php

function createElement($domObj, $tag_name, $value = NULL, $attributes = NULL)
{
    $element = ($value != NULL ) ? $domObj->createElement($tag_name, $value) : $domObj->createElement($tag_name);

    if( $attributes != NULL )
    {
        foreach ($attributes as $attr=>$val)
        {
            $element->setAttribute($attr, $val);
        }
    }

    return $element;
}

$dom = new DOMDocument('1.0', 'utf-8');

$elm = createElement($dom, 'foo', 'bar', array('attr_name'=>'attr_value'));

$dom->appendChild($elm);

echo $dom->saveXML();

?>

outputs : 
<?xml version="1.0" encoding="utf-8"?>
<foo attr_name="attr_value">bar</foo>

To avoid warning message "unterminated entity reference" you may use htmlentities() for escaping supplied value:
<?php
//...
$dom->createElement('name', htmlentities($text))
//...
?>

Although the built-in DOM functions are great, since they're designed to support generic XML, generating HTML DOMs becomes particularly verbose. I ended up writing this function to drastically speed things up.
Instead of calling something like
<?php 
  $div = $dom->createElement("div");
  $div->setAttribute("class","MyClass");
  $div->setAttribute("id","MyID");
  $someOtherDiv->appendChild($div);
?>
you can accomplish the same thing with:
<?php
  $div = newElement("div", $someOtherDiv, "class=MyClass;id=MyID");
?>
The "key1=value;key2=value" syntax is really fast to use, but obviously doesn't hold up if your content has those characters in it. So, you can also pass it an array:
<?php
  $div = newElement("div", $someOtherDiv, array("class","MyClass"));
?>
Or an array of arrays, representing different attributes:
<?php
  $div = newElement("form", $someOtherDiv, array(array("method","get"), array("action","/refer/?id=5");
?>

Here's the function:

<?php
function newElement($type, $insertInto = NULL, $params=NULL, $content="")
    {
        $tempEl =  $this->dom->createElement($type, $content);
        if(gettype($params) == "string" && strlen($params) > 0)
        {
            $attributesCollection =split(";", $params);
            foreach($attributesCollection  as $attribute)
            {
                $keyvalue = split("=", $attribute);
                $tempEl->setAttribute($keyvalue[0], $keyvalue[1]);
            }
        }
        if(gettype($params) == "array")
        {
            if(gettype($params[0]) == "array")
            {
                foreach($params as $attribute)
                {
                    $tempEl->setAttribute($attribute[0], $attribute[1]);
                }
            } else {
                $tempEl->setAttribute($params[0], $params[1]);
            }
        }
?>

Remember:

If you want to perform multiple actions with a new node, you may need to create a copy of it before

means: 
## Create an address to an unique memory block !
$td = $dom->createElement('td');
## Change some things in this original unique pattern
$td->setAttribute('class', 'saldo');

## clone the unique pattern to two own one's
$td1 = clone $td;
$td2 = clone $td;

## alter properties in each one
$td1->nodeValue = 'Ich bin die erste neue Node';
$td2->nodeValue = 'Ich bin die zweite neue Node';

## find the parent element
$tr = $dom->getElementById('t001-tr001');
## find the first and the last child (here only for clearity)
$first = $tr->firstChild;
$last = $tr->lastChild;

## produce the new nodes
$newtd1 = $tr->insertBefore($td1, $first);
$newtd2 = $tr->appendChild($td2);

conclusion:
YOU NEED AN ORIGINAL NEW NODE FOR EACH ACTION!

You may think insertBefore and insertAfter is a direct alternative for appendChild, this is not the case. 

<?php
$dom = new DOMDocument(); 
$dom->load($file);

$dom->appendChild($newNode); //Works fine
$dom->insertBefore($newNode, $refNode); //Will fail

$refNode->parentNode->insertBefore($newNode, $refNode); // thanx to yasindagli (first post)
?>

Note that the second parameter (value), although convenient, is non-standard. You should create elements like this instead:

<?php
$doc = new DOMDocument('1.0', 'iso-8859-1');

$root = $doc->createElement('test');
$doc->appendChild($root);

$root_text = $doc->createTextNode('This is the root element!');
$root->appendChild($root_text);

print $doc->saveXML();
?>

Or, alternatively, extend the DOMDocument class and add your own custom, convenience method to avoid intruding on the standard:

<?php
class CustomDOMDocument extends DOMDocument {
  function createElementWithText($name, $child_text) {
    // Creates an element with a child text node
    
    // @param  string  $name        element tag name
    // @param  string  $child_text  child node text
    
    // @return  object  new element
    
    $element = $this->createElement($name);
    
    $element_text = $this->createTextNode($child_text);
    $element->appendChild($element_text);
    
    return $element;
  }
}

$doc = new CustomDOMDocument('1.0', 'iso-8859-1');

$root = $doc->createElementWithText('test', 'This is the root element!');
$doc->appendChild($root);

print $doc->saveXML();
?>

Also use caution with (or avoid) the 'DOMElement->nodeValue' property. It can return some unexpected values and changing its value will replace (remove) all descendants of the element with a single text node. It's also non-standard; according to the DOM spec it should return NULL.

Note that the NUL character "\0" is not in the list of invalid characters for $name, so no error is triggered, but the tag name will be truncated at the null byte:

<?php

$dom = new DOMDocument('1.0', 'utf-8');
$el = $dom->createElement('foo' . "\0" . 'bar', 'Hello World');
echo $el->tagName; // outputs "foo"

?>

To create an element with DomDocument and to escape ampersand in the value.

Do this:

$element = new DOMDocument('1.0', 'UTF-8');

$test = $element->createElement('text');

$test ->appendChild($element->createElement('name'))
      ->appendChild($element->createtextNode('& I am ampersand');