I had written a pre-update plugin, it was working properly on my environment.
But after sending it across to the client, after he had deployed it we started getting the below mentioned error.
“XmlException: An error occurred while parsing EntityName”
We were actually passing secure configuration information to the plugin in the following format
<Config>
<url>http://CrmServer/MSCRMServices/2007/CrmService.asmx</url>
<orgname>OrgName</orgname>
<username>UserName</username>
<password>Password</password>
<domain>Domain</domain>
</Config>
And the issue was the password that was being used, it had ‘&’ character, which we then replaced with ‘&’ and the error got resolved.
Hope it helps!