The error I am getting is Code:73, The request xml was invalid. The
xml it displays in the error however is the correct ad text that I
want!

The code I am using is right out of the manual

$adObject = createAdObject($adgroupId, $adId );
$adObject->setDescription2("New text");

Both $adgroupId and $adId are the correct id's.

Any suggestions on things to try?

My problem wasn't the code I was using but the text I was trying to
send to update the ad.

After some testing, I have found that if the ad contains a £ sign, it
will fail, even if it is not on the line you are amending. I tried
substituting for the html entity ( £ ) but this sent it straight
through to the ad without changing it back to the £.

So my question is how do I edit or add a new ad that contains a £ sign?

In nusoap.php around line 611 there is a comment
 // Begin modification for APIlity

After that I put:
       $body = str_replace("Â", "£", $body);
       $body = str_replace("£", "£", $body);
       $body = str_replace("œ", "£", $body);

This allowed me to both create new ads and edit existing ads that have
a £ sign in them.

This might be relevant:

http://groups.google.com/group/adwords-api-php/msg/4345563633680a25

Vladimir Kornea
Delivery.com