From Dr. Rys:
As part of our improvements on OpenXML, we have changed the MSXML component from 2.6 to 3.0 (running in 2.6 backwards-compatibility mode) and moved to a private DLL (called MSXMLSQL.DLL) in order to avoid the reboot requirement when installing SQL Server 2005. This change has been released the first time in the April CTP and will also be included in SQL Server 2000 SP4 (yeah!).
I'm hoping that once I solve my server issue that I'll be able to explore SQL Server 2005 in earnest. But I'm excited to see that some of the improvements made in 2005 will also be showing up in 2000. I think this is a smart move and it shows that MS is committed to both products