ok nevermind I figured it out! Thanks for the help!
I noticed that the htmlspecialchars_uni function was somewhat un-doing what parse_bbcode2 was doing, so I removed it which gives me:
PHP Code:
require_once('./includes/functions_bbcodeparse.php');
echo "\t\t<content:encoded><![CDATA[". parse_bbcode2($thread['preview'], false, true, false, true) ."]]></content:encoded>\r\n";
Thanks again! hopefully that will help someone else out as well!