unable interpret unicode character

i have an aspx page creates an xmldocument vigilant sql information following transforms another xml request (rss feed) controlling an xslt record xpathnavigator xslcompiledtransform. catchy information enclose intelligent quotes (\u2019) law an blunder (unable interpret unicode impression \u2019 during index 947 specified formula page). i'm certain encoding settings work, nonetheless there proceed hinder but carrying check forms characters information i'm formulating xml attributes?

my xslt record looks this...

<?xml version="1.0" encoding="utf-8"?>
<xsl:stylesheet version="1.0" xmlns:xsl="http://www.w3.org/1999/xsl/transform">

    <xsl:output method="xml" version="1.0" encoding="iso-8859-1"/>

i've attempted changing xsl:output encoding utf-8 utf-16 nonetheless still same problem. any ideas?

here's formula helps...

xmldocument xdoc = new xmldocument();
xmlnode xnode = requests.xmlnode(xdoc, imagetype, request, promotionpageid, eventpageid);
xdoc.appendchild(xnode);

response.clear();
response.contenttype = "text/xml";
response.addheader("content-type", "text/xml");

if (xsltfile != string.empty)
{
    xpathnavigator xnav = xdoc.createnavigator();
    xslcompiledtransform xsltransform = new xslcompiledtransform();
    xsltransform.load(server.mappath(string.format("~/xslt/{0}.xslt", xsltfile)));
    xsltransform.outputsettings.encoding.
    xsltransform.transform(xnav, null, response.outputstream);
}
else
{
    xdoc.save(response.outputstream);
}

response.end();