[OT] entity defintions

I'm having a bit of trouble with a pound sign in a SOAP message. The
parser seems to choke on pound signs, even when they are encoded as
£. The document is encoded as UTF-8. Can anyone confirm that these
numerical entities are the most fundamental type and are automatically
defined in all XML grammars?

Thanks.

-- 
  They had a big meeting, drank some beer and had some pizza and
  decided 'A' would be 65.
       - Jim Greenly, professor at Georgia Institute of Technology