Update:
I updated to MSXML6. I changed syntax to:
EXEC @hr = sp_OACreate 'MSXML2.DOMDocument.6.0', @xmlDOMObj OUTPUT
SQL Service no longer stops. I now get the following error:
ODBC: Msg 0, Level 19, State 1
SqlDumpExceptionHandler: Process 59 generated fatal exception c0000005 EXCEPTION_ACCESS_VIOLATION. SQL Server is terminating this process.
Connection Broken
I do have SQL2000 SP4