I know this an old thread but I recently had this problem, so here's the solution
you need to run SQLXML3.0 sp3 against the 2005 server. 2005 Server editions come with SQLXML4.0 which doesn't have this option
you can run both 3.0 and 4.0 at the same time
also if you have 64-bit environment, you need to get IIS6.0 to run 32bit operations.
Hope this helps someone.