already in upstream 3.4.z
Verified in rhevm-3.4.3-1.1.el6ev.noarch (av12.1). All variables in XML sysprep template files are now placed into CDATA section so all characters are represented the same way as they are entered. For example password 'pass</word>' now doesn't cause parsing error and it's set in the Windows guest. Note that the above doesn't apply to *custom* sysprep file, where user has to take care about the sysprep file validity by himself.
Since the problem described in this bug report should be resolved in a recent advisory, it has been closed with a resolution of ERRATA. For information on the advisory, and where to find the updated files, follow the link below. If the solution does not work for you, open a new bug report. https://rhn.redhat.com/errata/RHBA-2014-1712.html