i have files: username.txt and passwword.txt and sourcefile.txt

username.txt contains tjmannonline
password.txt contains abc123

username=`tail username.txt'
passwd=`tail password.txt'

my sourcefile.txt contains:

<RDID><![CDATA[USERNAME]]></RDID>
<user><![CDATA[USERNAME]]></user>
<password><![CDATA[PASSWORD]]></password>

sed -e 's/USERNAME/$username/g' sourcefile.txt > sourcefile.txt1
sed -e 's/PASSWORD/$passwd/g' sourcefile.txt1 > sourcefile.txt2

all said and done, i'd like to have this result:

<RDID><![CDATA[tjmannonline]]></RDID>
<user><![CDATA[tjmannonline]]></user>
<password><![CDATA[abc123]]></password>

sed -e 's/USERNAME/$username/g' did not replace USERNAME with tjmannonline, it replaced it with $username.