OSQL Unicode Insert of ^F (Hex 06) from Registry Multi-String Value is Duplicating in DB

I'm using a Unicode sql script imported using OSQL. One of the values
we are attempting to insert is a Registry Multi-String value by passing
a string to a stored procedure. These Multi-String values appear to be
delimited by a Hex 06 (^F) character. When I import this character,
embedded in a string preceeded by an N, i.e

N'something something2 something3'

I end up with TWO of this character in the db. I get :

something something2 something3

Any help figuring out why or how to fix this? We MUST use Unicode due
to extended character sets, so NOT using Unicode is NOT a solution.Seems to be an encoding issue. We are using SQLXML to retrieve the
data initially. That seems to be UTF-8 encoding the data which creates
an xml stream that contains an odd escape sequence. This escape
sequence is not then being translated into the correct unicode
representation in the insert scripts (which are created by transforming
the xml). We are going to try Unicode encoding on the SQLXmlCommand
object and setting the xml to encoding=UTF-16 to see what happens.