It seems that appendXML doesn't work always - for example if you try to append XML with 3 levels. Here is the function I wrote that always work (you want to set $content as innerHTML to $element):
function setInnerHTML($DOM, $element, $content) {
$DOMInnerHTML = new DOMDocument();
$DOMInnerHTML->loadHTML($content);
$contentNode = $DOMInnerHTML->getElementsByTagName('body')->item(0)->firstChild;
$contentNode = $DOM->importNode($contentNode, true);
$element->appendChild($contentNode);
return $elementNode;
}