You need to escape the ampersand on the RHS:

Code:

's#<enclosure>&\#x22;</enclosure>#<enclosure>\&\#x5e;</enclosure>#g'

Because it has a special meaning in the s command within sed.




--
Note:
If you choose a different delimiter you do not need to escape the hashes, for example:

Code:

's|<enclosure>&#x22;</enclosure>|<enclosure>\&#x5e;</enclosure>|g'

One could also use back references ( \1 and \2 ) in this case:

Code:

's|\(<enclosure>&#\)x22\(;</enclosure>\)|\1x5e\2|g'

Then you do not need to escape the ampersand, because it is not there
One could even use the backreference on the LHS:

Code:

's|<\(enclosure>\)&#x22;<\1|<\1\&#x5e;<\1|g'

But IMO that does not look very readable..