Then i found this:http://support.microsoft.com/kb/317169
Its vb, but heres some c# that also changes the encoding:
if (doc.FirstChild.NodeType == XmlNodeType.XmlDeclaration)
// Get the encoding declaration.
XmlDeclaration decl = (XmlDeclaration)
// Set the encoding declaration.
decl.Encoding = “UTF-16”;
Use this code after you have serialized the class to xml. Then use this and save your class.