I had a hard time finding this documented, so posting it here in case it helps someone:

If you want to use multiple libxml options, separate them with a pipe, like so:

<?php
$xml = simplexml_load_string($string, 'SimpleXMLElement', LIBXML_NOCDATA | LIBXML_NOBLANKS);
?>

A simpler way to transform the result into an array (requires json module).

<?php
function object2array($object) { return @json_decode(@json_encode($object),1); }
?>

Example:
<?php
$xml_object=simplexml_load_string('<SOME XML DATA');
$xml_array=object2array($xml_object);
?>

Be careful checking for parse errors. An empty SimpleXMLElement may resolve to FALSE, and if your XML contains no text or only contains namespaced elements your error check may be wrong. Always use `=== FALSE` when checking for parse errors.

<?php

$xml = <<<XML
<?xml version="1.0" encoding="UTF-8"?>
<ns1:Root xmlns:ns1="http://example.com/custom">
<ns1:Node>There's stuff here</ns1:Node>
</ns1:Root>
XML;

$simplexml = simplexml_load_string($xml);

// This prints "Parse Error".
echo ($simplexml ? 'Valid XML' : 'Parse Error'), PHP_EOL;

// But this prints "There's stuff here", proving that
// the SimpleXML object was created successfully.
echo $simplexml->children('http://example.com/custom')->Node, PHP_EOL;

// Use this instead:
echo ($simplexml !== FALSE ? 'Valid XML' : 'Parse Error'), PHP_EOL;

?>

See:

https://bugs.php.net/bug.php?id=31045
https://bugs.php.net/bug.php?id=30972
https://bugs.php.net/bug.php?id=69596

As was said before don't use var_dump() or print_r() to see SimpleXML object structure as they do not returns always what you expect.
Consider the following:

<?php

// data in xml
$xml_txt = '
<root>
  <folder ID="65" active="1" permission="1"><![CDATA[aaaa]]></folder>
  <folder ID="65" active="1" permission="1"><![CDATA[bbbb]]></folder>
</root>';

// load xml into SimpleXML object
$xml = simplexml_load_string($xml_txt, 'SimpleXMLElement', LIBXML_NOCDATA);//LIBXML_NOCDATA LIBXML_NOWARNING

// see object structure
print_r($xml);

/* this prints
SimpleXMLElement Object
(
    [folder] => Array
        (
            [0] => aaaa
            [1] => bbbb
        )

)
*/

// but...
foreach ($xml->folder as $value){
    print_r($value);
}
/* prints complete structure of each folder element:
SimpleXMLElement Object
(
    [@attributes] => Array
        (
            [ID] => 65
            [active] => 1
            [permission] => 1
        )

    [0] => aaaa
)

SimpleXMLElement Object
(
    [@attributes] => Array
        (
            [ID] => 65
            [active] => 1
            [permission] => 1
        )

    [0] => bbbb
)

*/
?>

There seems to be a lot of talk about SimpleXML having a "problem" with CDATA, and writing functions to rip it out, etc. I thought so too, at first, but it's actually behaving just fine under PHP 5.2.6

The key is noted above example #6 here:
http://uk2.php.net/manual/en/simplexml.examples.php

"To compare an element or attribute with a string or pass it into a function that requires a string, you must cast it to a string using (string). Otherwise, PHP treats the element as an object."

If a tag contains CDATA, SimpleXML remembers that fact, by representing it separately from the string content of the element. So some functions, including print_r(), might not show what you expect. But if you explicitly cast to a string, you get the whole content.

<?php
$xml = simplexml_load_string('<foo>Text1 &amp; XML entities</foo>');
print_r($xml);
/*
SimpleXMLElement Object
(
    [0] => Text1 & XML entities
)
*/

$xml2 = simplexml_load_string('<foo><![CDATA[Text2 & raw data]]></foo>');
print_r($xml2);
/*
SimpleXMLElement Object
(
)
*/
// Where's my CDATA?

// Let's try explicit casts
print_r( (string)$xml );
print_r( (string)$xml2 );
/*
Text1 & XML entities
Text2 & raw data
*/
// Much better
?>

It doesn't seem to be documented anywhere, but you can refer to an element "value" for the purpose of changing it like so:

<?php
$xml = simplexml_load_string('<root><number>1</number></root>');
echo $xml->asXml(). "\n\n";

$xml->number->{0} = $xml->number->{0} + 1;

echo $xml->asXml();
?>

echos:
<?xml version="1.0"?>
<root><number>1</number></root>

<?xml version="1.0"?>
<root><number>2</number></root>

However, this only works with a direct assignment, not with any of the other operators:

<?php
$xml = simplexml_load_string('<root><number>1</number></root>');
echo $xml->asXml(). "\n\n";

$xml->number->{0} += 1;
// Or:
$xml->number->{0}++;

echo $xml->asXml();
?>

Both of the above cases would result in:

<?xml version="1.0"?>
<root><number>1</number></root>

<?xml version="1.0"?>
<root><number>1<0/></number></root>

Please note that not all LIBXML options are supported with the options argument.

For instance LIBXML_XINCLUDE does not work. But there is however a work around:

<?php
$xml = new DOMDocument();
$xml->loadXML ($XMLString);
            
$xml->xinclude();
$xml = simplexml_import_dom($xml);

?>

Theres a problem with the below workaround when serializing fields containing html CDATA. For any other content type then HTML try to modfiy function parseCDATA.
Just add these lines before serializing.
This is also a workaround for this bug http://bugs.php.net/bug.php?id=42001

<?PHP
if(strpos($content, '<![CDATA[')) {
   function parseCDATA($data) {
      return htmlentities($data[1]);
   }
   $content = preg_replace_callback(
      '#<!\[CDATA\[(.*)\]\]>#',
      'parseCDATA',
      str_replace("\n", " ", $content)
   );
}
?>

A simple extension that adds a method for retrieving a specific attribute:

<?php
class simple_xml_extended extends SimpleXMLElement
{
    public    function    Attribute($name)
    {
        foreach($this->Attributes() as $key=>$val)
        {
            if($key == $name)
                return (string)$val;
        }
    }

}

$xml = simplexml_load_string('
<xml>
  <dog type="poodle" owner="Mrs Smith">Rover</dog>
</xml>', 'simple_xml_extended');

echo $xml->dog->Attribute('type');

?>

outputs 'poodle'

I prefer to use this technique rather than typecasting attributes.

<?php
$xml = json_decode(json_encode((array) simplexml_load_string($string)), 1);
?>

A reminder that json_encode attempts to convert data to UTF-8 without specific knowledge of the source encoding. This method can cause encoding issues if you're not working in UTF-8.

I wanted to convert an array containing strings and other arrays of the same type into a simplexml object.

Here is the code of the function array2xml that I've developed to perform this conversion. Please note that this code is simple without any checks.

<?php
function array2xml($array, $tag) {

    function ia2xml($array) {
        $xml="";
        foreach ($array as $key=>$value) {
            if (is_array($value)) {
                $xml.="<$key>".ia2xml($value)."</$key>";
            } else {
                $xml.="<$key>".$value."</$key>";
            }
        }
        return $xml;
    }

    return simplexml_load_string("<$tag>".ia2xml($array)."</$tag>");
}

$test['type']='lunch';
$test['time']='12:30';
$test['menu']=array('entree'=>'salad', 'maincourse'=>'steak');

echo array2xml($test,"meal")->asXML();
?>

Here is my simple SimpleXML wrapper function.
As far as I can tell, it does the same as Julio Cesar Oliveira's (above).
It parses an XML string into a multi-dimensional associative array.
The second argument is a callback that is run on all data (so for example, if you want all data trimmed, like Julio does in his function, just pass 'trim' as the second arg).
<?php
function unserialize_xml($input, $callback = null, $recurse = false)
/* bool/array unserialize_xml ( string $input [ , callback $callback ] )
 * Unserializes an XML string, returning a multi-dimensional associative array, optionally runs a callback on all non-array data
 * Returns false on all failure
 * Notes:
    * Root XML tags are stripped
    * Due to its recursive nature, unserialize_xml() will also support SimpleXMLElement objects and arrays as input
    * Uses simplexml_load_string() for XML parsing, see SimpleXML documentation for more info
 */
{
    // Get input, loading an xml string with simplexml if its the top level of recursion
    $data = ((!$recurse) && is_string($input))? simplexml_load_string($input): $input;
    // Convert SimpleXMLElements to array
    if ($data instanceof SimpleXMLElement) $data = (array) $data;
    // Recurse into arrays
    if (is_array($data)) foreach ($data as &$item) $item = unserialize_xml($item, $callback, true);
    // Run callback and return
    return (!is_array($data) && is_callable($callback))? call_user_func($callback, $data): $data;
}
?>

The XML2Array func now Recursive!

<?php
function XML2Array ( $xml , $recursive = false )
{
    if ( ! $recursive )
    {
        $array = simplexml_load_string ( $xml ) ;
    }
    else
    {
        $array = $xml ;
    }
    
    $newArray = array () ;
    $array = ( array ) $array ;
    foreach ( $array as $key => $value )
    {
        $value = ( array ) $value ;
        if ( isset ( $value [ 0 ] ) )
        {
            $newArray [ $key ] = trim ( $value [ 0 ] ) ;
        }
        else
        {
            $newArray [ $key ] = XML2Array ( $value , true ) ;
        }
    }
    return $newArray ;
}
?>

Here is my update to Bob's simple SimpleXML wrapper function.
I noticed his version would turn an empty SimpleXMLElement into an empty array.

<?php
    /**
     * http://php.net/manual/en/function.simplexml-load-string.php#91564
     *
     * bool/array unserialize_xml ( string $input [ , callback $callback ] )
     * Unserializes an XML string, returning a multi-dimensional associative array, optionally runs a callback on all non-array data
     * Returns false on all failure
     * Notes:
     * Root XML tags are stripped
     * Due to its recursive nature, unserialize_xml() will also support SimpleXMLElement objects and arrays as input
     * Uses simplexml_load_string() for XML parsing, see SimpleXML documentation for more info
     *
     * @param $input
     * @param null $callback
     * @param bool $recurse
     * @return array|mixed
     *
     */
    function unserialize_xml($input, $callback = null, $recurse = false)
    {
        // Get input, loading an xml string with simplexml if its the top level of recursion
        $data = ((!$recurse) && is_string($input))? simplexml_load_string($input): $input;
        // Convert SimpleXMLElements to array
        if ($data instanceof SimpleXMLElement){
            if(!empty($data)){
                $data = (array) $data;
            } else {
                $data = '';
            }
        }
        // Recurse into arrays
        if (is_array($data)) foreach ($data as &$item) $item = unserialize_xml($item, $callback, true);
        // Run callback and return
        return (!is_array($data) && is_callable($callback))? call_user_func($callback, $data): $data;
    }
?>

Use libxml_disable_entity_loader() to restrict loading of external files.  See http://www.idontplaydarts.com/2011/02/scanning-the-internal-network-using-simplexml/

If you want to set the charset of the outputed xml, simply set the encoding attribute like this :

<?php simplexml_load_string('<?xml version="1.0" encoding="utf-8"?><xml/>'); ?>

The generated xml outputed by $xml->asXML will containt accentuated characters like 'é' instead of &#xE9;.

Hope this help

Warning:

The parsing of XML-data will stop when reaching character 0.
Please avoid this character in your XML-data.

simplexml does not simply handle CDATA sections in a foreach loop.

<?php
$sx = simplexml_load_string('
<test>
 <one>hi</one>
 <two><![CDATA[stuff]]></two>
 <t>
  <for>two</for>
 </t>
 <multi>one</multi>
 <multi>two</multi>
</test>');
foreach((array) $sx as $tagname => $val) {
    if (is_string($val)) {
       // <one> will go here
    } elseif (is_array($val)) {
       // <multi> will go here because it happens multiple times
    } elseif (is_object($val)) {
      // <t> will go here because it contains tags
      // <two> will go here because it contains CDATA!
    }
}
?>

To test in the loop, do this

<?php
if (count((array) $val) == 0) {
    // this is not a tag that contains other tags
    $val = '' . $val;
    // now the CDATA is revealed magically.
}
?>

Attention:

simplexml_load_string has a problem with entities other than (<, >, &, " and '). 

Use numeric character references instead!

Wrapper XMLReader class, for simple SAX-reading huge xml:
https://github.com/dkrnl/SimpleXMLReader

Usage example: http://github.com/dkrnl/SimpleXMLReader/blob/master/examples/example1.php

after wondering around some time, i just realized something (maybe obvious, not very much for me). Hope helps someone to not waste time as i did :-P

when you have something like:

<?php
$xmlstr = <<<XML
<?xml version="1.0" encoding="utf-8"?>
<double xmlns="http://foosite.foo/">2328</double>
XML;
?>

you will have the simpleXML object "transformed" to the text() content:

<?php
$xml = simplexml_load_string($xmlstr);
echo $xml; // this will echo 2328  (string)
?>

if you want to use a class which exists in a name space, use it full name. simple_load_string did not recognize short one.

class.new.php
<?php
namespace foo\bar;

class new extends SimpleXMLElement
{
    public function do()
    {
        echo "done";
    }
}
?>

false.php
<?php
use \foo\bar\new;

$result = simplexml_load_string($xml, 'new'); // it gives warning
$result->do(); // fatal error
?>

true.php
<?php
use \foo\bar\new;
$result = simplexml_load_string($xml, '\foo\bar\new');

$result->do(); // prints done
?>