maybe you can post up the contents of the file? There might be a clue or two in there tho tbh it's looking like it's a problem with your installation/server as we have determined that the code you have works fine on the demo site.
<?xml version="1.0" encoding="UTF-8"?> -<rss xmlns:g="http://base.google.com/ns/1.0" version="2.0">-<channel><title>Your store name Google Base</title><link>http://base.google.com/base/</link><description>Information about products</description>-<item><g:id>4</g:id>-<title> <![CDATA[$100 Physical Gift Card]]> </title>-<description> <![CDATA[<p>Gift Cards must be redeemed through our site Web site toward the purchase of eligible products. Purchases are deducted from the GiftCard balance. Any unused balance will be placed in the recipient's GiftCard account when redeemed. If an order exceeds the amount of the GiftCard, the balance must be paid with a credit card or other available payment method.</p>]]> </description></item></channel></rss>